Rupee off lows, Dollar steady vs. major currencies

Thursday,   07-Nov-2019   12:23 PM (IST)

The Indian rupee is trading off intraday lows at 71.00/01 levels in the afternoon deals on dollar selling in the market. Rupee touched the low of 71.11/12 levels early today tracking losses on the Chinese Yuan following a report that rekindled fears about a delay in U.S.-China trade deal. India’s federal cabinet yesterday approved an earlier plan to set up a fund, initially worth 250 billion rupees ($3.52 billion), to complete stalled realty projects in the affordable and middle-income housing segments and support the real estate sector. Benchmark indices are trading higher. At 12:06 PM, the S&P BSE Sensex was trading at 40,510, up 40 points, while the broader Nifty50 was at 11,973, up 6 points. As per the technical indicators, range for USDINR pair for the remaining part of the day may be 70.75-71.25 levels. Rupee has an immediate support at 71.08 levels. A breach of the same may see rupee at 71.15 followed by 71.23 and 71.34 levels. On the positive side rupee is likely to face resistance at 70.96 levels and if it is able to break the same then it may gain up to 70.86 levels followed by 70.71 and 70.57 levels. In the forward segment 1mth, 3mth and 6mth annualized premia are currently trading at 3.15%, 3.50% and 4.02% respectively.

A lack of certainty on the long-awaited US-China preliminary trade deal, amid signs of a delay in sealing the deal, dampened the investor sentiment across Asia this Thursday. The US dollar regained the bids across the board amid a resurgence of flight to safety while the commodities wilted on trade doubts-led risk-aversion. The ultimate safe-haven gold treaded water above 1490 levels. Amongst the G10 currencies, the Japanese yen topped while the Kiwi emerged as the main laggard in the Asian trades. USD/JPY took a U-turn from 109.00 and fell sharply to near 108.65 levels, as risk-off crept back while the Aussie ignored a big beat on the Australian Trade Surplus and hit six-day lows of 0.6862. The Kiwi shed -0.30% to trade below the 0.6350 barrier. Meanwhile, the Canadian dollar was the strongest amongst the commodity-currencies, as stabilizing oil prices lent some support, with USD/CAD up 0.10% just under the 1.32 handle. Heading into the European opening bells, both the European currencies, the EUR/USD and Cable are on the back foot, with the Fiber holding above 1.1050 while the latter reached weekly lows sub-1.2850 amid renewed UK political jitters and ahead of the key Bank of England’s (BOE) “Super Thursday”.