Rupee edges lower, USDJPY lower

Friday,   14-Feb-2020   12:25 PM (IST)

The Indian rupee turns lower and is currently trading at 71.39/40 levels (12:15 pm) in the afternoon levels amid a rebound in Asian equities amid latest China updates on the virus and dollar index at new four-month highs. So far rupee traded in the range of 71.29-71.41 levels. India's wholesale inflation rose to 3.10 per cent in January, according to the data released by the Ministry of Commerce & Industry. The wholesale inflation grew 2.59 per cent during the month of December 2019. Indian indices recovered from the day's lows to trade flat. At 12:08 PM, the S&P BSE Sensex was trading at 41,443, down 17 points, while the broader Nifty50 was at 12,172, down 3 point. As per the technical indicators, range for USDINR pair for the remaining part of the day may be 71.10-71.60 levels. Rupee has an immediate support at 71.44 levels. A breach of the same may see rupee at 71.56 followed by 71.63 and 71.78 levels. On the positive side rupee is likely to face resistance at 71.32 levels and if it is able to break the same then it may gain up to 71.24 levels followed by 71.15 and 71.06 levels. In the forward segment 1mth, 3mth and 6mth annualized premia are currently trading at 3.17%, 3.62% and 3.65% respectively.

FX today in Asia was a quiet affair, as most majors traded in a tight range amid persistent broad-based US dollar strength and cautious optimism. China’s Hubei province reported a drop in new coronavirus cases while investors continued to fret over the negative economic fallout of the virus outbreak globally, as governments stepped up measures to soften the impact. Within the G10 currency basket, EUR/USD hit a new 34-month low at 1.0828, as the US dollar index refreshed a four-month top. The cable, on the other hand, consolidated the latest upsurge around 1.3050 amid UK Cabinet reshuffle. Meanwhile, USD/JPY fluctuated between gains and losses while below 110.00 amid mixed Asian equities, lower Treasury yields and moderate gains in the S&P 500 futures. The Aussie attempted a tepid bounce from near 0.6710 but lacked follow-through while NZD/USD traded under pressure below 0.6450. Oil prices steadied in Asia, having offered some support to the resource-linked Loonie. The safe-haven Swiss franc appeared to be the main laggard, as USD/CHF peeked briefly above the 0.9800 mark. The traditional safety bet, gold, also traded on the back foot below $1580.