Rupee opened lower, Yen firm vs. Dollar

Thursday,   23-Jan-2020   09:03 AM (IST)

The Indian rupee opened the day lower at 71.21/22 levels compared to its previous close at 71.1950/2050 levels amid further decline in Yuan, Asian equities; Brent crude at lowest in almost two months and is currently trading close to $62.40 per barrel. India's federal government bonds gain in early trade tracking continued fall in crude oil prices; market awaits RBI's INR100 billion special OMO auction. Benchmark indices were trading flat with a positive bias with gains in private banks and tech stocks offset by losses in FMCG counter. At 9:17 AM, the S&P BSE Sensex was trading at 41,187, up 72 point, while the broader Nifty50 was at 12,125, up 18 point. As per the technical indicators range for the USDINR pair may be 70.95-71.35 levels. Rupee has an immediate support at 71.26 levels. A breach of the same may see rupee at 71.37 followed by 71.43 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 71.03 levels followed by 70.88 levels.

The safe-haven Japanese yen was firm and the Chinese Yuan fragile on Thursday as traders kept a wary eye on the spread of a virus in China, while the ailing Australian dollar jumped after a surprise drop in unemployment. Deaths from the flu-like coronavirus, rose to 17 on Wednesday. A total of 571 cases have now been confirmed and Chinese state media reported overnight that transport to and from the city of Wuhan in central China, where the outbreak originated, is to be shut from 0200 GMT. The World Health Organisation will decide later on Thursday whether to declare the situation a global health emergency. The Yuan held around 6.9110 per dollar in morning offshore trade, not far above a two-week low hit on Wednesday. The Japanese yen, seen as a haven by virtue of Japan's position as the world's largest creditor, rose 0.1% to a two week high of 109.65 per dollar as investors sought safety. The U.S. dollar was otherwise steady, holding at about $1.1093 per euro and at 97.527 against a basket of currencies (DXY). A major concern is that the virus could spread quickly as millions of people travel across China, and the world, to celebrate the Lunar New Year at their hometowns. Elsewhere the Australian dollar , which has shed more than a cent this year as the domestic economy stalls, rose 0.5% to $0.6877 after jobs data showed an unexpected drop in unemployment. The figures showed 28,900 jobs created in December; nearly double market expectations, prompting a rapid unwinding of bets that the central bank will cut rates next month. Futures pricing shifted quickly from an even probability of a rate cut to only about a 1/4 chance. The British pound sat a fraction below a three-week high at $1.3147, after an overnight rebound in manufacturing sentiment prompted investors to trim rate cut bets. Factories' optimism about the outlook rose to its highest since August 2014, according to a quarterly survey from the Confederation of British Industry. The focus now turns to broader business surveys due on Friday.