Rupee turns lower, Australian Dollar up

Friday,   27-Mar-2020   12:33 PM (IST)

The Indian rupee is trading lower at 74.86/87 levels in the afternoon deals on dollar buying in the market. Rupee touched the high of 74.38/39 levels early today after a surge in jobless claims in the world's largest economy sent the dollar index to its worst day in over four years. The Reserve Bank of India slashed interest rates following other central banks, in an emergency move to counter economic fallout from a fast-spreading coronavirus. The RBI said it was maintaining its "accommodative" stance, and would maintain its position "as long as necessary" to revive growth, while ensuring inflation remained within target. The bank's six-member monetary policy committee (MPC) held a meeting this week by video conference to arrive at its decision. It cut the repo rate I by 75 basis points to 4.40%, in line with expectations. The reverse repo rate was reduced 90 basis points to 4% and CRR by 100 bps to 3%. At 12:10 PM, the S&P BSE Sensex was trading at 29,974, down 59 points, while the broader Nifty50 was at 8,705, up 63 point. As per the technical indicators, range for USDINR pair for the remaining part of the day may be 74.20-75.30 levels. Rupee has an immediate support at 74.97 levels. A breach of the same may see rupee at 75.13 followed by 75.43 and 75.72 levels. On the positive side rupee is likely to face resistance at 74.50 levels and if it is able to break the same then it may gain up to 74.21 levels followed by 74.05 and 73.88 levels.

The Asian equities tracked the Wall Street rally on Friday, induced by the US $2 trillion stimulus package. The market mood, however, remained cautious amid no stopping in the coronavirus spread globally. The US outstripped China with the most infections while there is no signs of a slowdown in the number of cases across Europe. Most major Asian markets rallied over 1%, barring the Australian stocks, which sank over 5% amid rising concerns over the virus impact on the economy following stricter measures announced by the Australian PM Scott Morrison. The tepid risk tone was well reflected by the losses in the US equity futures while broad US dollar sell-off extended on the US fiscal stimulus-led easing funding pressures. Amongst the G10 fx space, USD/JPY lost over 1% and fell back on the 108 handle while the Aussie rallied to a nine-day high above 0.6100, as markets cheered the upbeat telephonic conversation between US President Donald Trump and his Chinese counterpart Xi Jinping about the virus. EUR/USD tested the 200-DMA hurdle on its corrective advance from sub-1.07 levels while the cable briefly regained the 1.2300 level before reverting to 1.2250-70 region amid concerns over the EU-UK post-Brexit trade talks. Oil prices kept its recovery mode intact above $23 mark and added to the gains in the Canadian dollar, as USD/CAD breached the key 1.4000 level. Meanwhile, gold prices trimmed losses and regain $1640 amid persistent dollar weakness.