Rupee higher, Australian Dollar holding ground

Wednesday,   11-Dec-2019   12:21 PM (IST)

The Indian rupee is trading higher at 70.87/88 levels (12:10 pm) in the afternoon deals after touching the high of 70.7525/7625 levels on the back of dollar selling by a large foreign bank. So far rupee traded in the range of 70.7525-70.8925 levels. Traders awaited the U.S. Federal Reserve's decision on interest rates and updates on U.S. inflation. At 12:06 PM, the S&P BSE Sensex was trading at 40,278, up 38 points, while the broader Nifty50 was at 11,866, up 9 point. As per the technical indicators, range for USDINR pair for the remaining part of the day may be 70.65-71.10 levels. Rupee has an immediate support at 70.92 levels. A breach of the same may see rupee at 71.06 followed by 71.15 and 71.32 levels. On the positive side rupee is likely to face resistance at 70.78 levels and if it is able to break the same then it may gain up to 70.69 levels followed by 70.59 and 70.48 levels. In the forward segment 1mth, 3mth and 6mth annualized premia are currently trading at 3.51%, 3.48% and 4.00% respectively.

Forex today witnessed some volatility early in Wednesday’s Asian trading, in the face of increased of a hung UK parliament and New Zealand’s (NZ) Mid-Year Economic and Fiscal Update while uncertainty on the Dec 15. US tariffs kept the moves in check. The pound wilted after the latest YouGov poll showed the Conservatives Party majority narrowed to 28 seats that possibly could lead to a hung parliament. However, the Cable managed to recover to near 1.3140 from the early drop to 1.3108. Meanwhile, the Kiwi rallied hard to 0.6556 highs after the NZ government announced an increase in spending but the upside was short-lived on NZ FY 2019/20 growth cut forecasts. The Aussie shrugged off downbeat Australian Consumer Sentiment data and looming trade risks, as it held the higher ground on the 0.68 handle. The yen, in contrast, traded on the back foot vs. the US dollar, despite negative S&P 500 futures and mixed Asian equities, as USD/JPY found support near 108.70 on firmer US dollar and Treasury yields. Minor losses in oil prices weighed on the Canadian dollar, as USD/CAD advanced towards 1.3250. Gold bulls took a breather and hovered below $ 1465 levels in the lead up to the key Federal Reserve (Fed) monetary policy decision.