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Rupee opened lower, Chinese Yuan steady vs. Dollar

Monday,   02-Dec-2019   09:02 AM (IST)

The Indian rupee opened the day lower at 71.78/79 levels compared to its previous close at 71.74/75 levels and moves up to 71.69/70 levels in early deals. India's economic growth in September quarter slows more than expected. Indian economy grows 4.5% in July-September period, down from 5% in prior quarter. Indian government bonds turn little changed as profit booking offsets brief early gains led by bets of rate cut later this week, after lower-than-expected economic growth data. Benchmark indices tracked their Asian peers to open higher. At 9:20 AM, the S&P BSE Sensex was trading at 40,897, up 103 point, while the broader Nifty50 was at 12,072, up 16 point. As per the technical indicators range for the USDINR pair may be 71.50-72.00 levels. Rupee has an immediate support at 71.89 levels. A breach of the same may see rupee at 72.02 followed by 72.16 levels. On the positive side rupee is likely to face resistance at 71.62 levels and if it is able to break the same then it may gain up to 71.48 levels followed by 71.35 levels.

The Chinese Yuan stayed relatively steady as forex markets launched December with good news for China’s economy. China’s Caixin/Markit Manufacturing Purchasing Managers’ Index (PMI) was recorded at 51.8 in November, up from a reading of 51.8 the month earlier. On Friday, the official manufacturing PMI released by the National Bureau of Statistics (NBS) recorded a reading of 50.2, topping the 50 level that suggests expansion for the first time since April. The official non-manufacturing PMI came in at 54.4, the highest level since March. The US dollar stayed little changed on Monday in Asia following the release of strong economic data in the US the previous week. US-China trade talks remained in focus after Global Times, a nationalist English-language tabloid in China with links to the Communist Party of China, tweeted that any phase one trade deal would require that the US roll back tariffs. The next batch of American tariffs on Chinese goods are due to take effect on Dec. 15. Last week, U.S. President Donald Trump approved two bills that back Hong Kong’s anti-government protestors. The bills are more symbolic and have limited practical implications but China has vowed to take strong measures in retaliation, although it has not yet announced any specific action. In mainland China, The People’s Bank of China (PBOC) set the reference rate for the yuan, the midpoint around which the currency is allowed to trade, at 7.0262, slightly weaker than the 7.0247 set on Friday. The GBP/USD pair was down 0.14% to 1.2915. The Pound has taken a number of hits recently as polls continue to suggest that Boris Johnson’s Conservatives are poised to win in elections on December 12, paving the way for a rapid Brexit.