Rupee lower, USDJPY range bound

Monday,   18-Feb-2019   12:24 PM (IST)

The Indian rupee is trading lower at 71.52/53 levels in the afternoon deals underperforming other regional currencies, after India’s trade deficit widened on a sequential basis to more-than-expected levels. Rupee traded in the range of 71.31-71.52 levels so far amid further losses on Indian equities and concerns over oil prices. The benchmark indices are trading over 0.7 per cent lower weighed by information technology (IT), fast-moving consumer goods (FMCG) and automobile stocks. At 12:10 PM, the S&P BSE Sensex was trading at 35,546 down 263 points, while the broader Nifty50 was at 10,646, down 79 points. As per the technical indicators, range for USDINR pair for the remaining part of the day may be 71.10-71.70 levels. Rupee has an immediate support at 71.54 levels. A breach of the same may see rupee at 71.61 followed by 71.72 and 71.82 levels. On the positive side rupee is likely to face resistance at 71.35 levels and if it is able to break the same then it may gain up to 71.25 levels followed by 71.17 and 71.10 levels. In the forward segment 1mth, 3mth and 6mth annualized premia are currently trading at 4.72%, 4.34% and 4.15% respectively.

Markets cheered the renewed optimism induced by the US-China trade progress, boosting the appetite for the risk assets across the financial markets in Asia. Across the fx space, broad-based US dollar weakness remained the underlying theme, as weaker US fundamentals and risk-on trades weighed negatively. Meanwhile, the Antipodeans tracked the gains in the Chinese Yuan, oil and gold prices. The Kiwi emerged the top gainer this session, as the sentiment around the New Zealand dollar was further boosted by upbeat New Zealand January services PMI report. The Yen bulls stood resilient to the risk-on flows, keeping the USD/JPY range-bound around the 110.50 levels.