Rupee trading range bound, Yen firmed vs. dollar

Tuesday,   23-Oct-2018   12:30 PM (IST)

The Indian rupee is currently trading range bound at 73.73/74 levels (12:15 pm) in the afternoon deals. Rupee touched the low of 73.8225/8325 levels today tracking broad gains in the greenback, while continuous decline in local shares increased concerns of more foreign fund outflows. So far rupee traded in the range of 73.70-73.8225 levels. Indian government bonds were little changed in thin early trade ahead of an auction of state government bonds. Equity benchmarks are off their low points, with the Nifty trading around 10,150-mark. The Sensex is down 148.83 points at 33985.55, while the Nifty is down 57.75 points at 10187.50. As per the technical indicators, range for USDINR pair for the remaining part of the day may be 73.50 -74.00 levels. Rupee has an immediate support at 73.81 levels. A breach of the same may see rupee at 73.88 followed by 73.93 and 73.98 levels. On the positive side rupee is likely to face resistance at 73.68 levels and if it is able to break the same then it may gain up to 73.63 levels followed by 73.56 and 73.49 levels. In the forward segment 1mth, 3mth and 6mth annualized premia are currently trading at 4.92%, 4.43% and 4.34% respectively.

The Japanese yen, a safe haven in uncertain times, firmed against the dollar on Tuesday, as the euro and sterling suffered due to doubts over Italy’s budget spending and over British Prime Minister Theresa May’s future with Brexit talks stalled. The dollar weakened 0.21 in Asian trade to trade at 112.55 yen, gaining as risk-shy investors retreated from Asia’s main share markets. The sterling traded flat at $1.2960 on Tuesday, having lost 0.83 percent on Monday, its steepest fall in percentage terms since Sept. 21. The pound has lost 2.2 percent versus the greenback in the last seven trading sessions. With just over five months until Britain is scheduled to exit the EU, Brexit talks have hit an impasse, sparking speculation that May could be toppled by rebels in her Conservative Party. The euro eased marginally to $1.1453 on Tuesday, as concern over Italy’s free spending budget drove sentiment. The single currency failed to draw relief from a fall in Italian 10-year bond yields on Monday. The benchmark Italian 1-year yield declined by 3 percent on Monday, its steepest fall in percentage terms since Oct. 3. The dollar index, a gauge of its value versus six major peers, traded flat at 96.02 on Tuesday.