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Rupee lower, Australian Dollar lower

Friday,   08-Nov-2019   12:18 PM (IST)

The Indian rupee is trading lower at 71.25/26 levels (12:15 pm) in the afternoon deals after touching the low of 71.30/31 levels after ratings firm Moody's cut its outlook on the country, while uncertainty around the progress of a prospective Sino-U.S. trade deal punctured broader regional sentiment. So far rupee traded in the range of 71.18-71.30 levels. Benchmarks indices are trading in narrow range. At 12:06 PM, the S&P BSE Sensex was trading at 40,568, down 86 points, while the broader Nifty50 was at 11,980, down 32 points. As per the technical indicators, range for USDINR pair for the remaining part of the day may be 70.85-71.35 levels. Rupee has an immediate support at 71.31 levels. A breach of the same may see rupee at 71.36 followed by 71.49 and 71.55 levels. On the positive side rupee is likely to face resistance at 71.18 levels and if it is able to break the same then it may gain up to 71.07 levels followed by 70.95 and 70.84 levels. In the forward segment 1mth, 3mth and 6mth annualized premia are currently trading at 3.05%, 3.37% and 3.90% respectively.

The overnight US-China trade optimism was watered down by the comments from the White House Adviser Navarro that curbed the risk appetite across Asia. The market mood turned sour after Navarro denied any agreement on the removal of the existing tariffs on China, with the Asian equities paring back the early gains. Treasury yields also pulled back from three-month tops while US equity futures dropped about 0.30%. The US dollar, however, remained closed to three-week highs vs. its main peers. Amongst the G10 currencies, the Aussie was the biggest loser, weighed down by the latest trade deal doubts and dovish RBA Statement on Monetary Policy (SoMP), as markets overlooked the upbeat Chinese trade figures. AUD/USD failed several attempts above the 0.69 handle, having lost over 0.25% to hit session lows at 0.6872. The Kiwi also felt the pull of gravity, but the losses remain capped ahead of the 0.6350 level. Meanwhile, the safe-haven Yen recovered from half-yearly lows vs. the greenback but the USD/JPY bulls manage to defend the immediate support near 109.15. The USD/CAD pair, on the other hand, moved upwards towards the 1.3200 mark, mainly driven by the weakness in oil prices. Gold prices consolidated Thursday’s extensive drop around 1470 levels. Heading into the European morning trades, both the European currencies, the EUR/USD and Cable trade almost unchanged, as they take a breather after a volatile session witnessed a day before.