Rupee extends losses, Australian Dollar lower

Wednesday,   24-Apr-2019   12:22 PM (IST)

The Indian rupee extends losses and is currently trading at 69.91/92 levels (12:05 pm) in the afternoon deals after touching the low of 69.9450/9550 levels as strong U.S. housing data lifted the dollar index to its highest in almost two years, overshadowing rising dollar/rupee forward premiums amid abundant dollar liquidity. Jump in the greenback has outweighed the impact of fall in crude oil prices. Yesterday, the Reserve Bank of India received bids of $18.7 billion for the 3-year USD/INR swap, more than three times the notified amount of $5 billion. The cutoff on yesterday's dollar-rupee swap was at 8.38 rupees, higher than 7.76 in the previous auction in March. On the back of the auction results, the one-month forward premium climbed to 35 paisa and the one-year premium rose to 3.22 rupees. At the end of last week, one-month premium was at around 28 paisa and one-year at 2.84 paisa. Benchmark indices are trading higher after a flat opening. At 12:08 PM, the S&P BSE Sensex was trading at 38,657 up 92 points, while the broader Nifty50 was at 11,604, up 28 points. As per the technical indicators, range for USDINR pair for the remaining part of the day may be 69.50-70.15 levels. Rupee has an immediate support at 69.97 levels. A breach of the same may see rupee at 70.05 followed by 70.15 and 70.26 levels. On the positive side rupee is likely to face resistance at 69.80 levels and if it is able to break the same then it may gain up to 69.69 levels followed by 69.61 and 69.54 levels. In the forward segment 1mth, 3mth and 6mth annualized premia are currently trading at 5.16%, 4.54% and 4.34% respectively.

The USD bulls regained poise in Wednesday’s Asian trading while the Aussie got hammered across the board following a miss on the Australian headline and core CPI figures for the first quarter. Disappointing Australian inflation report led the markets to re-price their RBA rate cut forecasts to as soon as the next month, drowning the AUD/USD pair to six-week lows at 0.7027. The Kiwi also lost ground in tandem with its OZ peer, the AUD, and hit fresh three-month lows of 0.6614. The sentiment around the Antipodeans was also dented by a broad decline across the commodities space, with oil prices extending its retreat from six-month tops. Gold prices on Comex headed back to YTD lows below 1270 levels, despite mixed Asian equities and negative Treasury yields. Meanwhile, the Canadian dollar traded firmer again this session, as markets resorted to repositioning ahead of the Bank of Canada (BOC) rate decision. The safe-haven Yen picked-up bids towards Asia closing but traded within its familiar 111.75-112.00 range while both the European currencies, the Euro and the GBP, traded little changed, awaiting fresh impetus from the German data and Brexit-related headlines.