Rupee opened lower, Yen weaker vs. Dollar

Monday,   29-Apr-2024   09:52 AM (IST)

The Indian rupee opened the day lower at 83.3850/3950 levels compared to its previous close at 83.34/35 levels on month end dollar demand from importers. The market focuses on the Federal Reserve's interest rate decision and important U.S. data this week. Asian currencies were mostly down. Indian government bond yields trading marginally lower at start of the week as oil and Treasury yields come off highs. Indian shares opened higher supported by financials after post-results gains in SBI Life Insurance and ICICI Bank. At 9:21 AM, the S&P BSE Sensex was trading at 74,080 up 350 points, while the broader Nifty50 was at 22,504 up 84 points. As per the technical indicators range for the USDINR pair may be 83.30-83.55 levels. Rupee has an immediate support at 83.48 levels. A breach of the same may see rupee at 83.55 followed by 83.60 levels. On the positive side rupee is likely to face resistance at 83.32 levels and if it is able to break the same then it may gain up to 83.26 levels followed by 83.20 levels.

The Japanese yen hit its weakest levels since April 1990 on Monday, in trading thinned by a holiday in Japan and attempts by traders to test key levels and stop-loss orders in a nervous, illiquid market. The dollar rose as far as 160.245 yen in a sudden move after the yen traded in a narrow 158.05-158.15 range in early deals. A portfolio manager said "stops" on the pair at the key 160 level had been "taken out", meaning the yen's descent had forced those with long yen holdings and stop-loss orders around that big level to square positions, exacerbating its slide. The yen's move barely affected the euro and sterling, both of which stayed near the bottom of the ranges hit during Friday's volatile session. Markets are on guard for any intervention by Japanese authorities to contain the yen's nearly 11% fall this year. While the yen had its biggest drop in six months on Friday, it also briefly surged to 154.97 to the dollar, triggering speculation that Japanese authorities may have checked currency rates ahead of likely intervention. It was not immediately clear what caused the move. Japan's yen was at 159.105 by 0200 GMT, down 0.5%. Tokyo markets were closed for the first of the country's Golden Week holidays. The yen had moved nearly 3.5 yen between 158.445 and 154.97 on Friday as traders vented their disappointment after the Bank of Japan kept policy settings unchanged and offered few clues on reducing its Japanese government bond (JGB) purchases - a move that might have put a floor under the yen. The Federal Reserve's May 1 policy review is the prime focus for markets this week, with investors already anticipating a delay in its rate cuts after a batch of sticky U.S. inflation and as officials including Chair Jerome Powell emphasise even those plans are dependent on data. The Fed is seen holding its benchmark interest rate steady at 5.25%-to-5.5% at the April 30-May 1 meeting. Investors now see perhaps only a single cut this year, currently anticipated by November, according to the CME's FedWatch tool.