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Rupee opened lower, Yen higher vs. Dollar

Tuesday,   13-Aug-2019   09:03 AM (IST)

The Indian rupee opened the day lower at 71.19/20 levels compared to its previous close at 70.80/81 levels as Chinese Yuan extends losses and Argentine peso plunges by most in almost four years. Indian government bonds fall, with benchmark yield rising over 6.50%, as rupee falls below 71 to dollar tracking Asian units. Benchmark indices are trading lower in Tuesday's morning early session, amid weak global cues. At 9:30 AM, the S&P BSE Sensex was trading at 37,371, down 211 point, while the broader Nifty50 was at 11,067, down 42 point. As per the technical indicators range for the USDINR pair may be 70.75-71.35 levels. Rupee has an immediate support at 71.23 levels. A breach of the same may see rupee at 71.35 followed by 71.53 levels. On the positive side rupee is likely to face resistance at 71.00 levels and if it is able to break the same then it may gain up to 70.85 levels followed by 70.68 levels.

The yen stood near a seven-month high against the dollar on Tuesday as unrest in Hong Kong and gyrations in Argentina's markets heightened investor risk aversion and fanned demand for the safe-haven Japanese currency. The yen traded at 105.400 per dollar after brushing 105.050 overnight, its strongest since Jan. 3. The yen has been on a solid footing this month, supported by factors such as U.S.-China trade tensions and the prospect of further monetary easing by the U.S. Federal Reserve. The currency has received a fresh boost from deepening unrest in Hong Kong, where the international airport was closed to flights for several hours on Monday amid ongoing demonstrations. Surprise primary election results in Argentina, which resulted in a rout in the country's peso currency, stocks and bonds, have also added support. The Japanese currency has gained for the past four trading days against the greenback. A move beyond 104.100, this year's high scaled at the start of January, would take the yen to its highest level since November 2016. The euro was little changed at $1.1215. The single currency held modest gains made the previous day after Italian bond yields pulled back from five-week highs on relief that rating agency Fitch left the country's credit rating unchanged. The Australian dollar crawled up 0.15% to $0.6760. The Aussie had lost 0.5% the previous day, slipping in sympathy with the Chinese Yuan amid little sign of progress in U.S.-China trade relations. The Aussie is sensitive to developments in China, Australia's largest trading partner. Argentina's peso ended trade on Monday at 52.15 per dollar for a loss of roughly 15% after falling to an all-time low of 61.99. Fears of a possible return to interventionist policies, and by extension a possible debt default, gripped the market after conservative Argentina President Mauricio Macri lost by a much wider-than-expected margin to the opposition in presidential primaries.