Rupee off intraday high, Yen and Swiss franc firmed

Wednesday,   19-Dec-2018   12:30 PM (IST)

The Indian rupee came off the day’s high and is currently quoted 70.17/18 levels (12:23 pm) in the afternoon deals after two banks bought the greenback apparently on behalf of the central bank, trimming some gains triggered from crash in crude prices. So far rupee traded in the range of 69.85-70.21 levels. Investors now await the U.S. Federal Reserve’s decision on interest rates and projections for the next year, due later today. Benchmark indices continued to trade higher and are heading towards positive close for seventh consecutive session. After pricing in states poll outcome, the rally is largely led by fall in oil prices and appreciation in rupee. As per the technical indicators, range for USDINR pair for the remaining part of the day may be 69.60-70.40 levels. Rupee has an immediate support at 70.28 levels. A breach of the same may see rupee at 70.43 followed by 70.64 and 70.86 levels. On the positive side rupee is likely to face resistance at 69.92 levels and if it is able to break the same then it may gain up to 69.71 levels followed by 69.56 and 69.42 levels. In the forward segment 1mth, 3mth and 6mth annualized premia are currently trading at 3.98%, 3.79% and 3.94% respectively.

The safe-haven yen and the Swiss franc held a firm tone as an overnight plunge in oil prices provided another stark reminder of the dimming prospects for the global economy, and underscored why traders expect the Fed will likely be done after an expected rate hike this week. The yen and the Swiss franc each added a little more than 0.1 percent on the dollar, changing hands at 112.33 and 0.9916 respectively, building on three consecutive days of gains. Risk sentiment has been soured by weaker-than-expected economic data out of China and the euro zone, while the Sino-U.S. trade dispute and a collapse in oil prices have added to fears the global economy is fast losing momentum. In Asia, markets are looking to China’s three day Central Economic Working Conference (CEWC) meeting that starts on Wednesday for Beijing's growth and reform objectives. A steady downturn in China's economy this year has been one of the key drivers of asset markets, including currencies, over the past several months. Nervous anticipation was palpable in global markets as they awaited the Fed's decision later in the day, especially as they look to its policy guidance for 2019 after what is expected to be its fourth rate hike for this year. Elsewhere, the euro gained 0.2 percent at $1.1380, enjoying a rare uptick in the past three sessions as the dollar grappled with lower yields and monetary policy risks. The same reasons gave the Australian and New Zealand dollars a lift, gaining 0.2 percent each to $0.7195 and $0.6864, respectively.