Rupee inches lower, Euro steady vs. Dollar
Wednesday,
22-Jan-2020
12:22 PM (IST)
The Indian rupee has inches lower and is currently trading at 71.2050/2150 levels in the afternoon deals on dollar buying in the market. Focus remained on the Yuan and regional risk appetite amid a recent virus outbreak in China. The Chinese currency in early trades came under pressure after U.S. confirmed a case of the virus, but it managed a mild recovery following a press conference by Chinese officials. So far rupee traded in the range of 71.14-71.2050 levels. At 12:08 PM, the S&P BSE Sensex was trading at 41,206, down 128 points, while the broader Nifty50 was at 12,133, down 36 point. As per the technical indicators, range for USDINR pair for the remaining part of the day may be 71.00-71.35 levels. Rupee has an immediate support at 71.22 levels. A breach of the same may see rupee at 71.28 followed by 71.36 and 71.44 levels. On the positive side rupee is likely to face resistance at 71.15 levels and if it is able to break the same then it may gain up to 71.09 levels followed by 71.03 and 70.98 levels. In the forward segment 1mth, 3mth and 6mth annualized premia are currently trading at 3.58%, 3.92% and 4.01% respectively.
China’s transparency and the announcement of measures to counter the coronavirus outbreak calmed unnerved markets and revived risk appetite in Wednesday’s Asian trading. The Chinese stocks rebounded from YTD lows that led to a broad-based recovery in the regional indices. S&P 500 futures alongside US Treasury yields also firmed further while gold prices remained under pressure near $1550 levels. Across the fx space, USD/JPY bounced-off lows near 109.80 and regained the 110 handle as the virus fears subsided. Meanwhile, the US dollar hovered near five-week highs across its main competitors. As a result, both EUR/USD and cable traded almost unchanged on their road to recovery. Despite risk reset, the Antipodeans and Chinese Yuan failed to cheer up, as uncertainty over the lasting effect of the virus combined with worries over travel around the Chinese New Year remained a weight on the investors’ minds. USD/CAD advanced towards 1.3100 amid weaker oil prices, in the wake of the virus outbreak led worries over dwindling oil demand from China.
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