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Rupee opened flat, Yen holding gains vs. dollar

Friday,   14-Feb-2020   09:07 AM (IST)

The Indian rupee opened the day almost flat at 71.30/31 levels compared to its previous close at 71.3150/3250 levels amid latest China virus updates and dollar index at four-month highs. India's federal government bonds gain in early trade as investors remain bullish on hopes RBI will take more steps to keep yields under control. Indian indices were trading nearly half a per cent higher, lifted by buying in banks and tech counters. At 9:24 AM, the S&P BSE Sensex was trading at 41,659, up 199 point, while the broader Nifty50 was at 12,238 up 63 point. As per the technical indicators range for the USDINR pair may be 71.10-71.50 levels. Rupee has an immediate support at 71.38 levels. A breach of the same may see rupee at 71.49 followed by 71.63 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 71.09 levels followed by 70.95 levels.

The Japanese yen held onto gains against the dollar on Friday as renewed worries about the coronavirus outbreak supported demand for safe-haven currencies and weighed on prices of riskier assets. The Chinese Yuan nursed losses in offshore trade as the flu-like virus, which emerged late last year in China's Hubei province, slammed the brakes on consumer spending and manufacturing. The euro languished at multi-year lows versus the dollar and the Swiss franc as investors grow more pessimistic about the outlook in the euro zone before the release of gross domestic product data later on Friday. In contrast, the pound rode a wave of optimism into Asia on Friday due to hopes that a British cabinet reshuffle will lead to more expansionary fiscal policy to support growth. Officials in Hubei stunned financial markets on Thursday by announcing a sharp increase in new infections and deaths from the coronavirus, reflecting the adoption of a new method to diagnose the illness. Uncertainty about the scale of epidemic is likely to discourage investors from taking on excessive risk until there is sufficient evidence that its spread has slowed. The yen traded a tad higher at 109.79 per dollar on Friday in Asia, on course for its second day of gains. In the offshore market, the Yuan was quoted at 6.9910, following a 0.2% decline on Thursday. Hubei officials on Friday reported 4,823 new cases and 116 new deaths as of Feb. 13, but investors were still reeling after Hubei reported 14,840 new cases and a record daily increase in deaths on Thursday, using new diagnostic methods to reclassify a backlog of cases. The euro fell 0.1% to $1.0827, the lowest since April 2017, as investors braced for the release of GDP data from Germany and the euro zone later on Friday. The single currency was quoted at 1.0614 Swiss francs, close to the lowest since August 2015. The euro eased slightly to 83.06 pence, close to the weakest since December. Sentiment for the euro worsened after data earlier this weak showing a plunge in euro zone manufacturing output reinforced expectations that monetary policy will remain accommodative. The pound was little changed at $1.3046 following a 0.64% gain on Thursday due to expectations that British Prime Minister Boris Johnson's appointment of a new finance minister will lead to more fiscal spending to help Britain weather its transition away from the European Union.