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Rupee inches up, Australian Dollar lower

Wednesday,   10-Jul-2019   12:19 PM (IST)

The Indian rupee has inches up to 68.54/55 levels (12:10 pm) in the afternoon deals after touching the high of 68.4950/5050 levels due to dollar selling by foreign banks on suspected inflows. However, suspected dollar buying by RBI near 68.50 levels capped the gains. Rupee touched the low of 68.67/68 levels in early deals weighed by a further rise in oil prices, while traders await Federal Reserve Chairman Jerome Powell’s comments on U.S. interest rates and economy. At 12:12 PM, the S&P BSE Sensex was trading at 38,552 down 179 points, while the broader Nifty50 was at 11,501, down 55 points. As per the technical indicators, range for USDINR pair for the remaining part of the day may be 68.35-68.95 levels. Rupee has an immediate support at 68.64 levels. A breach of the same may see rupee at 68.74 followed by 68.81 and 68.88 levels. On the positive side rupee is likely to face resistance at 68.46 levels and if it is able to break the same then it may gain up to 68.39 levels followed by 68.29 and 68.18 levels. In the forward segment 1mth, 3mth and 6mth annualized premia are currently trading at 3.89%, 4.02% and 4.26% respectively.

Cautious optimism was the underlying theme in Wednesday’s Asian trading leading into Fed Chair Powell's testimony, with a broadly firmer US dollar underpinned by higher Treasury yields amid improved risk tones. Meanwhile, markets weighed in the ongoing US-China trade talks and escalating Japan-South Korea trade tensions. Among the Asia-Pac currencies, the USD/JPY pair refreshed six-week tops at 109.00 in early trades and consolidated the recent gains near 108.90 levels almost throughout the session. The Aussie fell to fresh three-week lows of 0.6918 on disappointing Chinese inflation figures while Kiwi emerged the weakest and slipped to multi-week lows of 0.6558 after stops got triggered below a break of the 0.6600 level. However, the spot managed to recover to the 0.66 handle amid a rally in oil prices and moderate risk-on. Gold futures on Comex faded rejection at the 1400 barrier and turned lower below 1395 levels. On the European currencies-side, EUR/USD clung to 1.12 handle amid ECB QE hopes and weak fundamentals while the Cable stalled its tepid recovery and fell back to mid-1.2400s amid looming Brexit and UK growth concerns.