India Rupee Opened Higher As Yuan Gains After US Delays China Tariffs

India Rupee Opened Higher As Yuan Gains After US Delays China Tariffs

12 Sep 2019 09:28 AM

USD/INR – The Indian rupee opened higher against the dollar after U.S. President Donald Trump postponed an increase in tariffs on $250 billion of Chinese shipments by two weeks, boosting demand for Asian currencies. The rupee opened at 71.42 compared with its previous close of 71.65. The rally in the Yuan in the wake of positive developments on the U.S.-China trade front makes it likely that the pair will fall below the immediate support of 71.40.  Yuan, along with local fundamentals, are currently the prime drivers of the rupee. On the latter, we will get more insight from the retail inflation and industrial production numbers due today.

EUR/USD – The world's two largest economies granted concessions in their heated tariff dispute on Wednesday ahead of planned talks. China exempted a basket of U.S. goods from its own tariffs while U.S. President Donald Trump said he would delay a scheduled tariff hike by two-weeks in October. The single currency has shed 3.5% since June and fell to a one-week low of $1.0983 overnight. It was steady at $1.1010 in Asian morning trade. With growth slowing, the ECB has all but promised more support for the economy in one of the most closely watched meetings in years. The ECB is almost certain to cut rates, promise to keep rates low for longer and provide banks relief from the side effects of negative rates. However, new asset purchases, priced in by markets, are not a done deal with some conservative policymakers opposing the move. The Euro is down roughly 0.5% on balance as selling pressure mounts headed into the ECB’s monetary. The EURO was last trading at $1.1013.

GBP/USD – The Pound Sterling US Dollar (GBP/USD) exchange rate slumped and the pairing is currently trading at around $1.2331. The US Dollar received an upswing of support this afternoon as data revealed US producer prices rose unexpectedly. August’s Producer Price Index (PPI) edged up by 0.1% despite forecasts expecting prices to remain unchanged. However, today’s inflation data is unlikely to alter market expectations that the US Federal Reserve will slash rates this month. Thursday’s European Central Bank (ECB) interest rate decision is likely to set the tone for next week’s Fed meeting. With markets expecting ECB policymakers to cut rates as part of a revival package, it is largely expected that the Fed will follow suit. The pound was last trading at $1.2333.

USD/JPY - USD/JPY hits a fresh six-week high of 107.78. The yen was weaker on Wednesday as a cautious risk-on mood dampened safe haven demand, while the euro was steady ahead of the upcoming European Central Bank meeting on Thursday. ECB policymakers are widely is expected to unveil a fresh wave of stimulus measures to shore up growth and inflation in the euro area economy, which has been hit by the escalating U.S.-China trade war and Brexit. The ECB could set the tone for upcoming rate-setting decisions by the U.S. Federal Reserve and the Bank of Japan next week, and for the broader global risk appetite. The USD/JPY was last trading at $108.10.

Currency range for today

Currency Lower Upper
USD/INR 71.25 71.75
EUR/INR 78.30 79.10
GBP/INR 87.70 88.50
JPY/INR 0.6580 0.6640

Important data releases today
Time Currency Event Forecast Previous
05.15 PM EUR Deposit Facility Rate (Sep -0.50% -0.40%
05.15 PM EUR ECB Marginal Lending Facility - 0.25%
05.15 PM EUR  ECB Interest Rate Decision  0.00% 0.00%
05.30 PM INR


3.30% 3.15%
6.00PM USD Core CPI (MoM) (Aug) 0.2% 0.3%