USD/INR may extend gains on oil bids, FII outflows

The Indian rupee little changed at 69.55 pair now at 69.60 against 69.4250 previous close.
Pair to tip in 69.40-69.75 range today.
Dollar/rupee may extend gains Wednesday on buying by nationalised banks likely on behalf of oil importers amid lingering risk woes around the US-China trade tiff, which has increased safe haven demand for the dollar. Nationalised banks are on the buy-side which is mostly for oil importers. Also, poor risk-appetite is leading to FII outflows from local equities, adding to the dollar demand. Crude oil prices remained firm around $70 a barrel as markets remained tight supported by US sanctions on crude exporters Iran and Venezuela.

Growing fears about the impact of a worsening U.S.-Sino trade conflict on global growth kept the safe-haven Japanese yen near recent highs against its peers on Wednesday. The yen in particular has drawn steady support from a flight-to-safety bid in recent days, though moves in foreign exchange markets have been relatively orderly compared with those in equity markets.
The euro was basically flat at $1.1195 after edging down overnight. The euro zone will rebound next year from a slow-down in 2019 and unemployment will fall further, but inflation is likely to stay at this year's levels and below the European Central Bank's target, the European Commission said on Tuesday.

Oil prices stabilised on Wednesday as markets remained relatively tight amid U.S. sanctions on crude exporters Iran and Venezuela.
Gold prices rose to their highest in more than a week on Wednesday as renewed worries over U.S.-China trade dispute and its potential impact on global growth dented risk sentiment, stoking investors towards safe-haven assets.

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