Rupee opened higher, Yen higher vs. Dollar

Friday,   03-May-2024   09:49 AM (IST)

The Indian rupee opened the day higher at 83.39/40 levels compared to its previous close at 83.47/48 levels tracking its higher Asian peers, fuelled by the drop in U.S. Treasury yields before the U.S jobs report. Indian government bond yields flattish in early trade as market awaits fresh supply. India's Nifty 50 index rose to a record high tracking a rally in its Asian peers and supported by Bajaj Finance's jump after restrictions on its lending products were lifted. At 9:31 AM, the S&P BSE Sensex was trading at 75,083 up 472 points, while the broader Nifty50 was at 22,784 up 136 points. As per the technical indicators range for the USDINR pair may be 83.20-83.50 levels. Rupee has an immediate support at 83.47 levels. A breach of the same may see rupee at 83.53 followed by 83.58 levels. On the positive side rupee is likely to face resistance at 83.30 levels and if it is able to break the same then it may gain up to 83.25 levels followed by 83.17 levels.

The yen was headed for its best week in more than a year on Friday, helped by Tokyo's suspected intervention this week to pull the Japanese currency away from 34-year lows, which also left the dollar broadly on the back foot. The yen rose to a session-high of 152.895 per dollar in early Asia trade and was set to clock a weekly gain of more than 3%, its largest since December 2022. It was last more than 0.4% stronger at 152.96 per dollar. Traders were left on tenterhooks for any further huge swings in the yen after Tokyo is suspected to have intervened to support its currency this week to the tune of some 9.16 trillion yen ($59.79 billion), as suggested by data from Bank of Japan (BOJ). Japan's latest forays into the currency market came during periods of thin liquidity, with the country out for a holiday on Monday while the second attempt happened late on Wednesday after Wall Street had closed. The yen has strengthened nearly eight yen against the dollar since the start of the week, when it first slid past the key 160 per dollar level which some have said could be the line in the sand for authorities. Elsewhere, the dollar lost ground against most of its peers and was headed for its worst week in nearly two months, in part due to the sharp rise in the yen this week. Traders are now looking to U.S. nonfarm payrolls data due later on Friday to guide the dollar's next moves, after Federal Reserve Chair Jerome Powell told markets this week that the central bank's next move in interest rates would likely be down, and not up as some had feared. The Fed held interest rates steady at the conclusion of its two-day monetary policy meeting, as expected, and signalled it is still leaning towards eventual rate cuts, even if they may take longer to come than initially expected. The euro ticked up 0.05% to last trade at $1.0730, and was eyeing a weekly gain of 0.35%. Sterling steadied at $1.25365 and was similarly set to rise more than 0.3% for the week. Against a basket of currencies, the dollar, which has struggled to regain its footing in the wake of the less-hawkish-than-feared Fed comments, was little changed at 105.32. The dollar index was on track to lose 0.7% for the week, its worst performance since March.