Rupee opened higher, Yen higher vs. Dollar

Thursday,   02-May-2024   10:11 AM (IST)

The Indian rupee opened the day higher at 83.41/42 levels compared to its previous close at 83.4250/4350 levels helped by a drop in the dollar after Federal Reserve Chair Jerome Powell said that a rate hike was unlikely. Asian currencies were higher between 0.1% to 0.6%. Indian government bond yields trend down in early trade tracking Treasury yields after Fed maintains rate cut narrative. Indian shares inched up on gains in energy stocks after oil prices fell overnight, while losses in Kotak Mahindra Bank after a senior executive's resignation capped gains. At 9:19 AM, the S&P BSE Sensex was trading at 74,644 up 161 points, while the broader Nifty50 was at 22,648 up 43 points. As per the technical indicators range for the USDINR pair may be 83.25-83.55 levels. Rupee has an immediate support at 83.50 levels. A breach of the same may see rupee at 83.58 followed by 83.65 levels. On the positive side rupee is likely to face resistance at 83.36 levels and if it is able to break the same then it may gain up to 83.30 levels followed by 83.22 levels.

The yen surged against the dollar in early Asian hours on Thursday on what traders suspected was another round of intervention by Japanese authorities to stop a sharp slide in the currency. The dollar fell sharply to precisely 153 yen from about 157.55 yen for reasons that were not immediately clear, but traders and analysts were quick to say it was dollar selling ordered by Japan's Ministry of Finance to support a currency languishing at 34-year lows. The latest move came in a quiet period for the currency pair, after the U.S. stock market had closed and with the Federal Reserve's monetary policy meeting ending hours earlier. The dollar was already on the back foot after Fed Chair Jerome Powell confirmed that the central bank's bias was towards interest rate cuts, even if the timing has been delayed by sticky inflation. The yen has been under pressure as U.S. interest rates have climbed and Japan's have stayed near zero, driving cash out of yen and into higher-yielding assets. The pressure has intensified since March as expectations for Fed rate cuts receded, reinforcing the yen's status as a cheap funding currency. When contacted by Reuters, Japan's vice finance minister for international affairs, Masato Kanda, who oversees currency policy, said he had no comment on whether Japan had intervened in the market. A U.S. Treasury spokesperson declined to comment on the move in the currency pair.