Rupee off lows, Australian Dollar up

Friday,   16-Aug-2019   12:21 PM (IST)

The Indian rupee has edges up to 71.27/28 levels (12:10 pm) in the afternoon deals after touching the high of 71.23/24 levels on dollar selling in the market and as domestic shares trimmed the early losses. Rupee fell in early trading to touch the low of 71.47/48 levels amid a further decline in domestic equities due to global growth concerns. Benchmark indices climbed off the day's low and turned flat in afternoon trade. At 12:08 PM, the S&P BSE Sensex was trading at 37,333, up 22 points, while the broader Nifty50 was at 11,026, down 4 points. As per the technical indicators, range for USDINR pair for the remaining part of the day may be 71.00-71.75 levels. Rupee has an immediate support at 71.42 levels. A breach of the same may see rupee at 71.57 followed by 71.66 and 71.76 levels. On the positive side rupee is likely to face resistance at 71.18 levels and if it is able to break the same then it may gain up to 71.09 levels followed by 70.94 and 70.80 levels. In the forward segment 1mth, 3mth and 6mth annualized premia are currently trading at 3.56%, 3.83% and 3.90% respectively.

The risk sentiment somewhat improved on Friday amid US President Trump’s optimistic comments on trade while upbeat US Retail Sales data offset recession fears. Markets ignored a weaker Yuan fix and looming Honk Kong concerns, as Treasury yields and US equity futures recovered. The Asian equities traded mixed, capping the upside in USD/JPY. USD/JPY traded firmer above 106.00, as the US dollar held onto its overnight gains, Japan's 10-year yield hit three year low. Gold eased below $ 1520 while oil prices rallied hard amid risk reset. The Aussie emerged the strongest while the Swiss Franc was the weakest heading into Europe. 50 members of the opposition Labour party are ready to join Tory rebels to stop no-deal Brexit. UK FinMin Javid will travel to Berlin to meet the German counterpart Scholz and discuss Brexit deal. UK Retail Sales unexpectedly rose 0.2% m/m in July, suggesting that the UK economy is in much better shape than feared. GBP/USD regained 1.2100 while EUR/USD hovered around 1.1100 after ECB Rehn said that the ECB stimulus may beat expectations.