Rupee dropped lower after flat opening, Yen higher vs. Dollar
Thursday,
14-Nov-2019
09:02 AM (IST)
The Indian rupee opened the day almost flat at 72.07/08 levels compared to its previous close at 72.09/10 levels but dropped to 72.24/25 levels in early deals on dollar purchases by private banks and weak Asian cues. India retail prices rose by 4.62% last month, fastest pace in sixteen months. Equity markets opened flat, but with positive bias. At 9:18 AM, the S&P BSE Sensex was trading at 40,169, up 53 point, while the broader Nifty50 was at 11,833, down 8 point. Indian government bonds gain early trade as hopes of rate cut in December intact despite headline retail inflation climbing to 16-month high in October. As per the technical indicators range for the USDINR pair may be 71.85-72.45 levels. Rupee has an immediate support at 72.27 levels. A breach of the same may see rupee at 72.47 followed by 72.55 levels. On the positive side rupee is likely to face resistance at 72.00 levels and if it is able to break the same then it may gain up to 71.86 levels followed by 71.75 levels.
Doubts over whether the United States and China will be able to reach a preliminary trade deal helped to lift safe-haven currencies such as the yen and the Swiss franc on Thursday, while pulling the Yuan lower. Adding to pressure, Chinese retail sales, industrial output and investment data were weaker than expected, sending the Australian dollar, already knocked by soft local employment data, to a one-month low. U.S.-China trade negotiations have ‘hit a snag’ over farm purchases, with Beijing not wanting a deal that looks one-sided in favor of the United States, the Wall Street Journal reported on Wednesday, citing people familiar with the matter. The report came after President Donald Trump said a trade deal with China was “close,” but offered no details and warned that he would raise tariffs “substantially” on Chinese goods if there was no deal. An agreement last month between the two economic powers to sign a “phase one” pact to end their trade war boosted optimism in global financial markets, lifting the Yuan and other risk-sensitive currencies. The Japanese currency, often used as a safe-haven asset because of Japan’s status as the world’s largest net creditor nation, has hit a five-month low of 109.49 a week ago. Against the euro, the yen was firm at 119.60 per euro, near one-month high touched the previous day. The yen hardly budged after Japan’s GDP data showed the economy grew an annualized 0.2% in July-September, much below economists’ forecast of 0.8%. The Swiss franc has been firm, having risen almost 0.6% over the last two days against the euro, to hit its highest level in more than a month. The unexpectedly downbeat China data highlighted continued pressure on the world’s second-largest economy and subsequent risks to global growth. The Yuan took the data in its stride, though, staying little changed at 7.0223 Yuan per dollar in onshore trade. But it stood off its three-month high of 6.9650 touched on Friday.
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