Rupee rose, Australian Dollar up

Thursday,   14-Dec-2017   12:29 PM (IST)

The Indian rupee rose and is currently trading at 64.27/28 levels (12:15 pm) in the afternoon deals after touching the high of 64.25/26 levels after the Federal Reserve lifted interest rates as expected, but maintained its projection for three increases next year amid concerns about low inflation in the world’s largest economy, pressuring the greenback and U.S. Treasury yields. However, greenback purchases by state-run banks, most likely on behalf of the central bank, limited further gains. So far rupee traded in the range of 64.25-64.35 levels. Sensex extends decline and Nifty below 10,200. As per the technical indicators range for the USDINR pair for the remaining part of the day may be 64.10-64.60 levels. Rupee has an immediate support at 64.33 levels. A breach of the same may see rupee at 64.39 followed by 64.43 and 64.51 levels. On the positive side rupee is likely to face resistance at 64.23 levels and if it is able to break the same then it may gain up to 64.19 levels followed by 64.13 and 64.07 levels. In the forward segment 1mth, 3mth and 6mth annualized premia are currently trading at 3.52%, 3.97% and 4.41% respectively.

The Australian dollar held gains in Asia on Thursday as jobs data lent a hand and despite weaker than expected retails sales and industrial output from top trading partner China. AUD/USD traded at 0.7667, while USD/JPY changed hands at 112.66. NZD/USD fell 0.26% to 0.7004 as the release of the new Labour-led government's federal budget showed lower growth ahead. China reported industrial production for November came in at a gain of 6.1%, compared with a 6.2% rise seen followed by retail sales which rose 10.2%, compared to a 10.3% rise expected and fixed asset investment came in up 7.2% as seen. Earlier, Australia reported employment change data for November showed job jumped by 61,600 with a gain of 19,200 jobs expected and under a steady unemployment rate of 5.4% and participation rate of 65.5%, higher than the 65.1% seen. The Federal Reserve approved its third rate hike of 2017, and forecasts further rate hikes despite growing concerns over the slow pace of inflation. Fed officials also expressed optimism in the economy, hiking their projection for economic growth in 2017 to 2.5%, while growth in 2018 was expected to rise to 2.5%, a 0.4% increase from the Fed’s September projections. The report raised investor expectations for ongoing bullish economic growth, lifting sentiment on riskier assets like equities.