Rupee slips lower, Australian Dollar flat
Monday,
19-Aug-2019
12:21 PM (IST)
The Indian rupee drops to 71.30/31 levels (12:15 pm) in the afternoon deals after touching the low of 71.38/39 levels on importers dollar demand. After opening at 71.17/18 levels rupee briefly rose to 71.06/07 levels today on dollar selling by foreign banks. Investors’ focus remained on trade-related developments between the U.S. and China. At 12:14 PM, the S&P BSE Sensex was trading at 37,674, up 324 points, while the broader Nifty50 was at 11,133, up 85 points. As per the technical indicators, range for USDINR pair for the remaining part of the day may be 71.00-71.55 levels. Rupee has an immediate support at 71.45 levels. A breach of the same may see rupee at 71.58 followed by 71.79 and 71.99 levels. On the positive side rupee is likely to face resistance at 71.15 levels and if it is able to break the same then it may gain up to 70.94 levels followed by 70.83 and 70.71 levels. In the forward segment 1mth, 3mth and 6mth annualized premia are currently trading at 3.52%, 3.81% and 3.86% respectively.
The risk sentiment in Asia, at the start of a new week, was lifted across the financial markets, as the US President Trump’s trade-negative remarks were outweighed by the German stimulus hopes and China’s interest rates reform news. The Treasury yields and US equity futures extended their bounce while the Asian equities rose as the US yield curve inversion reversed amid improved risk tone. Oil prices rallied nearly 1% alongside the equities while Gold eased towards 1515 levels. On the fx front, most majors traded in a tight trading range amid a lack of significant fundamental drivers and as markets digested the latest trade/ political headlines. The Aussie traded modestly flat, capped below the 0.68 handle while the Kiwi traded on the back foot ahead of the 0.64 handle despite the growth in New Zealand’s factory gate prices in Q2. The USD/JPY pair enjoyed good two-way business within a 25-pips range, as traders absorbed dismal Japanese exports data. Among the European currencies, EUR/USD kept its range near the 1.11 handle, but remains vulnerable ahead of key macro data due later this week. Meanwhile, the Cable hovered around the 1.2150 level amid looming Brexit anxiety.
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