Rupee higher, USDJPY higher

Tuesday,   12-Feb-2019   12:24 PM (IST)

The Indian rupee is trading higher at 70.88/89 levels in the afternoon trade as foreign banks sold dollars, offsetting the broad strength in the greenback. So far rupee traded in the range of 70.88-71.2150 levels. However, volatility in crude oil prices and the dollar index’s strength will likely keep the gains in check. Mid-month demand from importers will also be watched. India’s retail inflation data for January and industrial production data for December will be released after market hours today. Benchmark indices are moving in a narrow range amid firm Asian markets. At 12:15 PM, the S&P BSE Sensex was trading at 36,352, down 43 points, while the broader Nifty50 was ruling at 10,882, down 6 points. As per the technical indicators, range for USDINR pair for the remaining part of the day may be 70.70-71.20 levels. Rupee has an immediate support at 71.14 levels. A breach of the same may see rupee at 71.34 followed by 71.46 and 71.58 levels. On the positive side rupee is likely to face resistance at 70.83 levels and if it is able to break the same then it may gain up to 70.70 levels followed by 70.51 and 70.32 levels. In the forward segment 1mth, 3mth and 6mth annualized premia are currently trading at 4.38%, 4.18% and 4.02% respectively.

The risk-on sentiment dominated the Asian trades this Tuesday on the back of the US President Trump’s optimism on the US-China trade deal. The Asian markets cheered improved risk appetite while the US dollar stalled its upside and consolidated the recent gains versus its main peers. The Aussie benefited the most from an unexpected uptick in the National Australia Bank’s (NAB) survey readings and trade deal hopes, having made a few attempts to test the 0.71 barrier. The Kiwi also followed suit and hit three-week lows at 0.6740 while the USD/JPY pair surpassed the 110.50 level to hit fresh seven-week tops at 110.66. Further upside in the US equity futures and Treasury yields aided the fresh leg up in the spot. Meanwhile, both the Euro and the GBP traded better bid, looking to stabilize ahead of the key central bankers’ speeches. On the commodities’ front, both crude benchmarks traded with moderate gains amid US-China trade while gold prices on Comex traded modestly flat above 1310 levels.