Rupee opened higher, Yen higher vs. Dollar

Wednesday,   14-Aug-2019   09:04 AM (IST)

The Indian rupee opened the day higher at 71.00/01 levels compared to its previous close at 71.40/41 levels tracking broad rally in Asian currencies after US defers implementing tariffs on some Chinese imports. Indian government bonds fall in early trade as non-food, non-fuel, or core, retail inflation rose in July, adding to uncertainty over future rate cuts. India's headline retail inflation rate eased to 3.15% on year in July from 3.18% in June but core inflation rose to around 4.5% from 4.1%, data released after market yesterday showed. Benchmark indices are trading higher in early morning session amid gains in Asian stocks after US President Donald Trump yesterday backed off his September 1 deadline for 10 per cent tariffs on remaining Chinese imports. At 9:21 AM, the S&P BSE Sensex was trading at 37,091, up 133 point, while the broader Nifty50 was at 10,957, up 31 point. As per the technical indicators range for the USDINR pair may be 70.60-71.20 levels. Rupee has an immediate support at 71.15 levels. A breach of the same may see rupee at 71.32 followed by 71.58 levels. On the positive side rupee is likely to face resistance at 70.78 levels and if it is able to break the same then it may gain up to 70.63 levels followed by 70.44 levels.

The yen edged higher on Wednesday as currency investors took a skeptical view of U.S. President Donald Trump's decision to delay additional tariffs on some Chinese goods. The offshore yuan edged slightly lower against the dollar before the release of closely-watched industrial output and retail sales data due later in the day. The temporary reprieve in the trade war supported risk-off trades on Tuesday, but analysts warn that the optimism is already fading as there is no quick solution to the trade row, which has threatened global economic growth. Increasingly violent clashes between protesters and police in Hong Kong, worries about Britain's exit from the European Union, and Middle East tensions mean risk aversion could quickly flare up again and roil major currencies. The dollar fell 0.27% to 106.47 yen. The Australian dollar also fell 0.3% to 72.33 yen, while the New Zealand dollar fell 0.2% to 72.39 yen. Against the offshore yuan, the dollar rose 0.2%.  U.S. President Donald Trump on Tuesday backed off his Sept. 1 deadline for 10% tariffs on remaining Chinese imports, delaying duties on cellphones, laptops and other consumer goods, in the hopes of blunting their impact on U.S. holiday sales. Still, trade negotiations between the United States and China have progressed in fits and starts, so many investors and analysts have scaled back expectations for a resolution in the near term. The dollar index was little changed at 97.783 after jumping 0.4% on Tuesday. The euro was also mostly unchanged, trading at $1.1148. Hong Kong's airport resumed operations on Wednesday, rescheduling hundreds of flights that had been disrupted over the past two days as protesters clashed with riot police in a deepening crisis in the Chinese-controlled city. Ten weeks of increasingly violent clashes between police and pro-democracy protesters, angered by a perceived erosion of freedoms, have plunged the Asian financial hub into its worst crisis since it reverted from British to Chinese rule in 1997. Traders will closely watch Chinese economic data due later on Wednesday to measure the impact of the trade war. Year-on-year growth in Chinese industrial output and retail sales are expected to slow in July compared to the previous month, according to a Reuters poll of economists. China's government will release the data later on Wednesday.