Rupee higher, USDJPY slightly up

Tuesday,   28-Jan-2020   12:22 PM (IST)

The Indian rupee is trading higher at 71.34/35 levels (12:16 pm) in the afternoon deals after touching the high of 71.3150/3250 levels boosted by a further decline in oil prices on China virus fears. Recovery in local equities despite weak Asian cues further helped the local unit. So far rupee traded in the range of 71.3150-71.4050 levels. Benchmark indices pared all morning gains to trade flat. At 12:05 PM, the S&P BSE Sensex was trading at 41,195, up 40 points, while the broader Nifty50 was at 12,121, up 2 point. As per the technical indicators, range for USDINR pair for the remaining part of the day may be 71.15-71.65 levels. Rupee has an immediate support at 71.39 levels. A breach of the same may see rupee at 71.48 followed by 71.55 and 71.63 levels. On the positive side rupee is likely to face resistance at 71.30 levels and if it is able to break the same then it may gain up to 71.21 levels followed by 71.10 and 71.00 levels. In the forward segment 1mth, 3mth and 6mth annualized premia are currently trading at 3.53%, 4.05% and 4.04% respectively.

China’s fast-spreading coronavirus epidemic and the rising death toll ensued a slump in the Asian equity markets, as investors remained wary about the contagion risks and its implications on the global economic growth. China’s National Health Commission (NHC) reported confirmed coronavirus cases at 4,515 and death toll at 106 while the first case of the virus was confirmed in Germany. However, a sense of calm prevailed across G10 fx space, with most majors in tight trading ranges, as the US dollar held steady near two-month highs against its main competitors. The US Treasury yields traded modestly flat while the US stock futures rebounded over 0.50%. USD/JPY held onto minor recovery gains around 109.00 while the Antipodeans renewed multi-week lows. The Kiwi hit a new seven-week low at 0.6536, tracking the weakness in the Chinese Yuan. Meanwhile, the Canadian dollar was undermined by weaker oil prices, as USD/CAD tested the 1.32 handle. EUR/USD traded close to 2020 lows on 1.1000 despite the upbeat German IFO survey. GBP/USD stalled its overnight bounce and traded flat in mid-1.30s, with all eyes on the Bank of England (BOE) base rate decision and post-Brexit trade talks with the EU. Amid fragile market mood, gold prices consolidated the recent gains around $1480 while oil prices traded on the back foot, extending a week-long losings streak.