Rupee extends losses, Australian Dollar up

Tuesday,   13-Aug-2019   12:21 PM (IST)

The Indian rupee is trading lower at 71.23/24 levels (12:15 pm) in the afternoon deals after touching the low of 71.2675/2775 levels as increasing negative sentiment surrounding the Sino-U.S. trade deal and political unrest in some regions dented demand for Asian assets. After opening at 71.19/20 levels, rupee trimmed its losses to move up to 71.0325/0425 levels on dollar sales by state-run banks. However, rupee could not sustain the gain and dropped back on dollar buying in the market. Asian equities and currencies fell as investor appetite for risk assets was dented amid a plunge in the Argentine peso, on-going protests in Hong Kong and expectations of a delay in the U.S.-China trade deal. At 12:10 PM, the S&P BSE Sensex was trading at 37,421, down 161 points, while the broader Nifty50 was at 11,070, down 40 points. As per the technical indicators, range for USDINR pair for the remaining part of the day may be 70.85-71.45 levels. Rupee has an immediate support at 71.29 levels. A breach of the same may see rupee at 71.35 followed by 71.48 and 71.61 levels. On the positive side rupee is likely to face resistance at 71.10 levels and if it is able to break the same then it may gain up to 70.97 levels followed by 70.90 and 70.78 levels. In the forward segment 1mth, 3mth and 6mth annualized premia are currently trading at 3.71%, 3.83% and 3.88% respectively.

Broad-based US dollar rebound was the main underlying theme in Tuesday’s Asian trading, as better risk tones sent the Treasury yields higher in tandem with the US equity futures. However, the Wall Street turmoil kept the Asian equities on the back foot while Gold prices headed towards six-year highs above $ 1520 levels. Markets continued to weigh in the Hong Kong protests and Argentinian crisis. Amidst improved risk sentiment and broad USD comeback, the Yen, the Swiss Franc and the Euro slipped. The USD/JPY pair bounced-back towards 105.60 regions while the USD/CHF extended the recovery from multi-month lows beyond the 0.97 handle. The EUR/USD pair kept the recent range play intact but failed to resist above the 1.12 handle yet again. The Cable also turned lower towards the mid-1.20s amid looking Brexit anxiety and ahead of the key UK employment data. Meanwhile, the Antipodeans eked out moderate gains, with the Aussie buoyed near 0.6760 region, mainly by upbeat Australian NAB survey and the rally in gold prices. Meanwhile, the Kiwi battled 0.6450 amid aggressive Reserve Bank of New Zealand (RBNZ) rate cut calls. The USD/CAD pair traded flat below the 1.3250 level despite risk-on and a pause in the oil-price rally.