Rupee edges up, Australian Dollar up

Monday,   02-Dec-2019   12:20 PM (IST)

The Indian has edges higher and is currently trading at 71.72/73 levels (12:15 pm) in the afternoon trade after touching the high of 71.6750/6850 levels amid focus on growth outlook after data showed that India’s economic growth hit a more than six-year low. So far rupee traded in the range of 71.6750-71.78 levels. Data released after market close on Nov. 29 showed that India’s economy grew 4.5% from a year earlier in the July-September period, down from 5% in the prior period. Meanwhile, the Chinese Yuan was slightly higher against the dollar after better-than-expected manufacturing data. The country's manufacturing sector activity inched up in November, but the upturn remained subdued as growth rates for new orders as well as production were modest, a monthly survey said on Monday. The IHS Markit India Manufacturing PMI rose to 51.2 in November from 50.6 in October, when it had fallen to a two-year low, indicating only a slight improvement in the health of the sector. Erasing their early gains, benchmark indices are trading flat. At 12:12 PM, the S&P BSE Sensex was trading at 40,833, up 39 points, while the broader Nifty50 was at 12,058, up 2 point. As per the technical indicators, range for USDINR pair for the remaining part of the day may be 71.50-72.00 levels. Rupee has an immediate support at 71.77 levels. A breach of the same may see rupee at 71.88 followed by 71.97 and 72.07 levels. On the positive side rupee is likely to face resistance at 71.67 levels and if it is able to break the same then it may gain up to 71.56 levels followed by 71.45 and 71.34 levels. In the forward segment 1mth, 3mth and 6mth annualized premia are currently trading at 3.14%, 3.24% and 3.65% respectively.

Signs of stabilization in the Chinese economy, in the wake of a surprise upturn in the world’s second-largest economy’s manufacturing sector activity, overshadowed the negative US-China trade reports and mixed Australian data. Therefore, the market mood remained lifted across Asia on Monday, having boosted the higher-yielding assets at the expense of the safe-havens such as Yen, Gold etc. Across the fx board, the Kiwi was the top gainer, up almost 0.50% near 0.6450 amid the latest Chinese optimism and the rebound in oil prices. Meanwhile, the resource-lined CAD failed to benefit from firmer oil prices and remained on the back foot near 1.3300 levels. The Aussie also jumped to multi-day tops near 0.6780 region while the Yen dropped to six-month lows against the US dollar at 109.72, tracking the gains in the US equity futures, Asian equities and the US Treasury yields. Amongst the European currencies, EUR/USD held steady above the 1.10 handle while GBP/USD slipped towards the 1.29 handle on narrowing Conservatives’ lead over Labour Party and broad US dollar recovery.