Rupee opened higher, Yen supported vs. Dollar

Wednesday,   22-Jan-2020   09:02 AM (IST)

The Indian rupee opened the day higher at 71.13/14 levels compared to its previous close at 71.20/21 levels amid rebound in Yuan after China’s press briefing on new virus. Chinese officials say they will publish daily new cases of virus nationwide and there was no evidence of “super spreaders” though it could not be ruled out, Reuters reported. India's federal government bonds largely unchanged in early trade as investors await New Delhi's annual budget due on February 1. Benchmark indices were trading almost half a per cent higher, lifted by gains in pharma and auto stocks. At 9:26 AM, the S&P BSE Sensex was trading at 41,468, up 145 point, while the broader Nifty50 was at 12,214, up 44 point. As per the technical indicators range for the USDINR pair may be 71.00-71.35 levels. Rupee has an immediate support at 71.23 levels. A breach of the same may see rupee at 71.32 followed by 71.41 levels. On the positive side rupee is likely to face resistance at 71.11 levels and if it is able to break the same then it may gain up to 71.06 levels followed by 70.95 levels.

The yen was supported while the Yuan was on the back foot on Wednesday as investors tried to assess the risk of the outbreak of a new coronavirus in China disrupting the country's economy and trade partners. The virus, which causes a type of pneumonia, has spread to cities including Beijing and Shanghai as the number of patients in China more than tripled. More cases were also reported outside China, including the United States. Against the yen, the U.S. dollar slipped to 109.86 yen from Tuesday's high of 110.23. The offshore Yuan lost 0.6% on Tuesday, its biggest fall in more than a month, and last stood at 6.9100 Yuan per dollar. The Australian dollar, often used as a proxy bet on the Chinese economy, fetched $0.6844, near its lowest levels in 10 weeks. News of the coronavirus evoked memories of the 2002/03 outbreak of Severe Acute Respiratory Syndrome (SARS), which killed nearly 800 people globally and led to a sharp downturn in tourism in Asia. The euro stood at $1.1083, after dipping slightly on Monday. Sterling traded at $1.3050 , having gained a tad on Tuesday after data showed the British economy created jobs at its strongest rate in nearly a year in the three months to November. The strong data slightly dented expectations of an interest rate cut by the Bank of England at the end of this month, though markets are still pricing in about a 60% chance of a 0.25 percentage point cut.