Rupee inches lower, Australian Dollar on back foot

Wednesday,   14-Aug-2019   12:22 PM (IST)

The Indian rupee has inches lower to 71.1075/1175 levels (12:14 pm) in the afternoon deals on importers dollar demand. Rupee touched the high of 70.8625/8725 levels early today after the U.S. delayed implementation of tariffs on some Chinese goods, boosting risk appetite and Asian currencies. Wholesale inflation eased to 1.08 per cent in July, from 2.02 per cent in the previous month, government data showed. Benchmark indices are holding on to their gains in afternoon 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 12:10 PM, the S&P BSE Sensex was trading at 37,271, up 313 points, while the broader Nifty50 was at 11,018, up 93 points. As per the technical indicators, range for USDINR pair for the remaining part of the day may be 70.80-71.40 levels. Rupee has an immediate support at 71.16 levels. A breach of the same may see rupee at 71.24 followed by 71.39 and 71.54 levels. On the positive side rupee is likely to face resistance at 70.94 levels and if it is able to break the same then it may gain up to 70.79 levels followed by 70.71 and 70.63 levels. In the forward segment 1mth, 3mth and 6mth annualized premia are currently trading at 3.61%, 3.89% and 3.94% respectively.

The optimism over the US tariffs delay on the Chinese goods faded in the Asian trading this Wednesday, as mounting concerns over the Hong Kong political risks and a big miss on the Chinese activity numbers kept the risk sentiment somewhat frag. The safe-haven Yen was the biggest gainer, with USD/JPY downed to 106.21 levels. The Aussie continued to trade on the back foot below the 0.68 handle, having failed to survive multiple attempts above the last. The Kiwi traded better bid near 0.6460 region despite the drop in oil prices. Both the EUR/USD pair and Cable traded little changed and held the recent lower ground amid a broad-based US dollar upside consolidation. Meanwhile, the Asian currencies, such as the Yen, the CNY and Indian Rupee, gained amid a slightly stronger Yuan fix. Gold prices, on the other hand, traded muted around 1500 levels, awaiting fresh trade/ political headlines for the next direction.