Rupee gains, AUDUSD lower

Monday,   09-Dec-2019   12:20 PM (IST)

The Indian rupee gains and is currently trading at 71.15/16 levels (12:15 pm) in the afternoon deals after touching the high of 71.09/10 levels on dollar sales by foreign banks that outweighed the impact of a robust U.S. jobs report. Rupee opened lower at 71.29/30 levels today. So far rupee traded in the range of 71.09-71.29 levels. Rupee and most other Asian currencies came under pressure after the dollar index rose by most in a month on Dec. 6 and 10-year U.S. Treasury yield climbed to near 1.85% following the U.S. jobs report. Finance Minister Nirmala Sitharaman said over the weekend that the government is working on more steps to revive the sagging economy. The steps include a rationalisation of personal income tax rates, she said, according to media reports. U.S. and China trade updates remain in focus ahead of the Dec. 15 deadline when more U.S. tariffs came into effect. White House economic adviser Larry Kudlow said on Friday that President Donald Trump likes where trade talks with China are going but confirmed the Dec. 15 deadline to impose the new tariffs remains in place, Reuters reported. At 12:06 PM, the S&P BSE Sensex was trading at 40,546, up 101 points, while the broader Nifty50 was at 11,957, up 35 point. As per the technical indicators, range for USDINR pair for the remaining part of the day may be 70.90-71.50 levels. Rupee has an immediate support at 71.26 levels. A breach of the same may see rupee at 71.38 followed by 71.46 and 71.55 levels. On the positive side rupee is likely to face resistance at 71.06 levels and if it is able to break the same then it may gain up to 70.97 levels followed by 70.86 and 70.75 levels. In the forward segment 1mth, 3mth and 6mth annualized premia are currently trading at 3.28%, 3.39% and 3.89% respectively.

Forex today experienced a sense of caution in Asia this Monday, as Sunday’s dismal Chinese trade data combined with looming US Dec. 15 tariffs overshadowed the latest trade optimism. The US dollar held onto the upbeat US payrolls induced gains vs. most majors, although the further upside lacked follow-through amid a retreat in the US Treasury yields. Meanwhile, gold prices were sidelined around 1460 levels following Friday’s sharp decline. On the G10 fx space, the Antipodeans traded on the back foot on China’s exports drop, with Aussie pressured below 0.6850 while the Kiwi was offered around the midpoint of the 0.65 handle. The pullback in oil prices after the OPEC+ decision led gains also kept the commodity-currencies, including the Canadian dollar, in the red. USD/CAD traded +0.10% higher around 1.3260 regions. Meanwhile, USD/JPY corrected from near 108.70 levels and returned to the 108.50 support area, as the yen was underpinned by upbeat Japanese Q3 GDP data and tepid risk sentiment. Amongst the European currencies, both EUR/USD and GBP/USD attempted a minor bounce, with Cable buoyed by favorable UK election polls.