Rupee trading higher, Yuan little changed vs. Dollar
Monday,
20-Aug-2018
12:32 PM (IST)
The Indian rupee is trading higher at 69.7475/7575 levels (12.19 pm) in the afternoon trade after touching the high of 69.74/75 levels amid optimism of easing trade tensions between the U.S. and China that hurt demand for the safe-haven dollar and boosted regional currencies. So far rupee traded in the range of 69.74 -69.87 levels. Indian government bonds rose tracking a recovery in the local currency and as the minutes of the rate-setting Monetary Policy Committee’s latest meeting did not spring any surprises on the market. The domestic stock market is trading on firm footing as both the key equity benchmarks hit fresh highs today. After opening above the crucial 11,500 mark for the first time ever, the Nifty hit a record high of 11,545.30.The BSE Sensex also reached a fresh peak of 38,266.95. As per the technical indicators range for the USDINR pair may be 69.60-70.15 levels. Rupee has an immediate support at 69.84 levels. A breach of the same may see rupee at 69.97 followed by 70.07 and 70.17 levels. On the positive side rupee is likely to face resistance at 69.71 levels and if it is able to break the same then it may gain up to 69.66 levels followed by 69.58 and 69.50 levels. In the forward segment 1mth, 3mth and 6mth annualized premia are currently trading at 4.70%, 4.30% and 4.23% respectively.
The Chinese Yuan was little changed, while the dollar gained on Monday as traders awaited the outcome of the U.S.-China trade talks due later this week.The USD/CNY pair edged up 0.01% to 6.8794. The dollar has gained about 6% against the yuan since the start of the year as the Chinese currency weakened due to both escalating trade tensions as well as the recent Turkish lira crisis that drove up the demand of the U.S. dollar. China and the U.S. announced on Thursday that lower-level trade talks would be held on August 22-23 to resolve intensifying trade disputes between the two countries. A nine-member delegation from Beijing will hold meetings with U.S. officials, according to officials from both countries. In addition, reports over the weekend said U.S. President Donald Trump and Chinese leader Xi Jinping may meet in November. Meanwhile the USD/JPY pair also gained 0.1%, while the AUD/USD pair fell 0.1%.The upward trend in the U.S. dollar has also pressured oil, with U.S Crude down for a seventh consecutive week and global benchmark Brent off for a third week. Brent was 22 cents lower at $71.61 a barrel, while U.S. crude eased 24 cents to $65.67.
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