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Rupee steady, Australian Dollar up

Thursday,   11-Jul-2019   12:20 PM (IST)

The Indian rupee is trading steady at 68.35/36 levels  (12:08 pm) in the afternoon levels  after touching the high of 68.30/31 levels amid broad dollar weakness after remarks by Federal Reserve Chair Jerome Powell revived bets of an aggressive rate cut later this month. However, technical dollar buying and dollar bids from a large state-run bank capped further advance in the rupee. So far rupee traded in the range of 68.30-68.3825 levels. At 12:10 PM, the S&P BSE Sensex was trading at 38,762 up 205 points, while the broader Nifty50 was at 11,563, up 65 points. As per the technical indicators, range for USDINR pair for the remaining part of the day may be 68.00-68.55 levels. Rupee has an immediate support at 68.39 levels. A breach of the same may see rupee at 68.47 followed by 68.57 and 68.66 levels. On the positive side rupee is likely to face resistance at 68.30 levels and if it is able to break the same then it may gain up to 68.23 levels followed by 68.15 and 68.08 levels. In the forward segment 1mth, 3mth and 6mth annualized premia are currently trading at 3.94%, 4.28% and 4.51% respectively.

The sell-off in the US dollar across its main peers continued in Thursday’s Asian trading, as the Asian traders reacted to the dovish testimony by the Fed Chair Powell that more than confirmed Fed rate cuts are likely. Most majors kept their recovery momentum intact, with the Yen having emerged the strongest, followed by the Antipodeans. Gold prices also rallied towards the 1430 level, as Treasury yields extended the overnight declines. The Aussie extended the bounce and moved closer towards the 0.70 handle amid upbeat Australian home loans data and renewed US-China trade jitters. Its OZ neighbor, the Kiwi traded 0.40% firmer near 0.6670 region, helped by higher oil prices. The USD/JPY pair, on the other hand, fell sharply and breached the 108.00 support area, despite the Asian equities cheering the resurgent Fed rate cut expectations. Meanwhile, both the EUR/USD and Cable extended the recent upside momentum but markets remained wary ahead of the European Central Bank (ECB) minutes and Bank of England (BOE) Chief Carney’s speech due later in the session ahead.