Rupee opened higher, Dollar lower vs. major currencies

Friday,   21-Jul-2017   09:08 AM (IST)

The Indian rupee opened the day higher at 64.38/39 levels compared to its previous close at 64.43/44 levels as politics in Washington and hawkish comments from ECB chief keeps dollar subdued. Benchmark indices opened in green on stellar June quarter numbers from Reliance Industries and a Rs 11,000 crore share buyback announcement by Wipro. Indian government bonds are trading nearly flat ahead of fresh supply today even as sentiment positive after ECB keeps rates steady. As per the technical indicators range for the USDINR pair may be 64.20-64.55 levels. Rupee has an immediate support at 64.48 levels. A breach of the same may see rupee at 64.54 followed by 64.62 levels. On the positive side rupee is likely to face resistance at 64.28 levels and if it is able to break the same then it may gain up to 64.23 levels followed by 64.18 levels.

The dollar headed for weekly losses on Friday, wallowing at its lowest levels against the euro in nearly two years after European Central Bank chief Mario Draghi said policymakers would discuss changing its bond-buying program in the autumn. The dollar index, which tracks the greenback against a basket of six major rivals, was flat on the day at 94.316, not far from its overnight low of 94.090, its deepest nadir since August 2016. It was down 0.8 percent for the week. The euro caught its breath at $1.1625 after climbing as high as $1.1659 on Thursday, its loftiest peak since August 2015. Draghi said that no exact date had been set for discussing any changes to the ECB's ultra-easy monetary program but did specify the season. The dollar was nearly flat on the day against the yen at 111.92, after touching an overnight low of 111.48, its lowest since June 27. It was on track to shed 0.5 percent for the week. The euro was also nearly flat against its Japanese counterpart at 130.13 yen after rising to 130.26 on Thursday, within sight of last week's high of 130.76 yen, its highest since February. It was on track to gain 0.8 percent for the week. The dollar's losses against the yen were mitigated by market expectations that the Bank of Japan will lag well behind other major central banks in scaling back its massive stimulus program. On Thursday, the BOJ kept monetary policy steady as expected and delayed the timing to achieve its ambitious inflation target, though it slightly raised its growth forecasts. Concerns over low inflation will likely keep the Federal Reserve from raising U.S. rates at its policy meeting next week. Fed Chair Janet Yellen signaled caution in her congressional testimony last week, with disappointing U.S. inflation and retail sales data a week ago adding to evidence that the central bank has reason to take its time in tightening. U.S. President Donald Trump's failure to garner enough support for his healthcare bills in the Senate this week also weighed on the dollar, as it raised fears about the likelihood of passing his stimulus and tax reform agendas.