Rupee at fresh record low in opening trades, Dollar steady vs. major currencies

Thursday,   11-Oct-2018   09:07 AM (IST)

The Indian rupee opened the day lower at 74.30/31 levels compared to its previous close at 74.20/21 levels and slipped further to hit the fresh record low of 74.48/49 levels in early deals amid a rout in global equities. However, there are suspected dollar sales by RBI in the market which is limiting losses in rupee. Benchmark indices cracked at open with Sensex down nearly 1000 pts and Nifty below 10,200 levels following Asian share markets that sank on Thursday after Wall Street suffered its worst drubbing in eight months. At 9:32 AM, the S&P BSE Sensex was trading at 33,860, down 901 points, while the broader Nifty50 was ruling at 10,196, down 264 points. Indian government bonds rise ahead of central bank’s INR120 billion open market purchase of notes and as fall in crude oil prices boosts demand. Oil prices fell to two-week lows, but failed to provide any support to the rupee. As per the technical indicators range for the USDINR pair may be 74.10-74.95 levels. Rupee has an immediate support at 74.54 levels. A breach of the same may see rupee at 74.72 followed by 75.00 levels. On the positive side rupee is likely to face resistance at 74.13 levels and if it is able to break the same then it may gain up to 73.97 levels followed by 73.88 levels.

The dollar was steady against a basket of currencies on Thursday after spooked investors drove U.S. stocks to their worst fall in nearly eight months overnight. The dollar index fell 0.11 percent to 95.407 on Thursday, after hitting a high of 95.79 in the previous session. The safe-haven yen strengthened to 112.25 against the dollar, its highest this month, taking heart from risk aversion in the wake of warnings from the IMF over global growth and financial stability. The U.S. Federal Reserve's apparent determination to raise interest rates over the next 12 months has driven up U.S. Treasury yields, which have been further bolstered by good economic data. Expectations of hawkish rate rises may have been at work on Wednesday when sellers sent the Nasdaq to close at 7044.49, its lowest level since early July. The S&P 500 and Dow Jones Industrial Average weren’t too far behind, both falling more than 3 percent. Benchmark 10-year yields cooled off from a seven-year high of 3.261 percent hit on Tuesday to 3.1667 percent. The euro rose 0.16 percent to 1.1536 on Thursday after hitting a low of 1.1477 in the previous session. EU Brexit negotiator Michel Barnier said on Wednesday the parties had agreed on much of the withdrawal agreement ahead of a summit of the bloc's 28 national leaders next week. But the euro's gains are likely to be limited with markets worried about the sustainability of Italy's public finances, despite Italian Economy Minister Giovanni Tria stating that the government would do everything in its power to regain the confidence of financial markets.