Rupee lower, Yen up vs. Dollar

Thursday,   22-Feb-2018   12:30 PM (IST)

The Indian rupee is trading lower at 65.10/11 levels in the afternoon deals tracking bullish sentiment for the greenback after the Fed minutes supported bets for faster rate hikes this year amid upbeat economic growth expectations. There was some dollar selling by state-run banks, likely on behalf of the Reserve Bank of India which helped rupee to move up to 64.96/97 level in early deals.  Nifty tests 10,350 levels ahead of F&O expiry. As per the technical indicators, range for USDINR pair for the remaining part of the day may be 64.75-65.25 levels. Rupee has an immediate support at 65.14 levels. A breach of the same may see rupee falling to 65.19 followed by 65.28 and 65.37 levels. On the positive side, rupee is likely to face resistance at 65.00 levels and if it is able to break the same then it may gain up to 64.91 levels followed by 64.87 and 64.82 levels. In the forward segment 1mth, 3mth and 6mth annualized premia are currently trading at 4.24%, 4.60% and 4.27% respectively.

The Japanese currency stole the limelight across the fx space in Asia this Thursday, despite the FOMC minutes-induced rally in Treasury yields, as risk-aversion emerged the key theme after the Asian equities joined the Wall Street sell-off. Rising expectations of a faster pace of the US tightening pushed the Treasury yields higher across the curve, in turn, weighed down on the alternative risk assets such as the equities. On the other hand, the Antipodeans, the EUR, and GBP traded in the red zone, as the US dollar held steady near 8-day tops of 90.08 versus its main competitors. Among the commodities, gold prices dropped nearly -0.50% to $ 1325 levels while WTI was down 1%, as a broadly stronger dollar offset a report of a drop in the US crude stockpiles.