Rupee opened higher, Dollar little changed vs. major currencies

Wednesday,   17-Oct-2018   09:09 AM (IST)

The Indian rupee opened the day higher at 73.41/42 levels compared to its previous close at 73.46/47 levels but turned lower in early deals to touch the low of 73.49/50 level due to dollar demand from oil and other importers. Brent crude up 0.1% at 81.47, heading for fourth day of advance. Saudi Arabia and US tension over missing journalist underpin oil prices. Majority of Asian currencies higher after biggest rally on Wall Street since March. Indian government bonds little changed as rupee gives up initial gains to trade flat against dollar. Equities are off their high points on the back of some selling in the non banking financial companies and some names in the pharmaceutical space. At 09:46 am the Sensex is up 255.10 points or 0.73% at 35417.58, while the Nifty is higher by 69.30 points or 0.65% at 10654.10. As per the technical indicators range for the USDINR pair may be 73.00-73.70 levels. Rupee has an immediate support at 73.55 levels. A breach of the same may see rupee at 73.68 followed by 74.06 levels. On the positive side rupee is likely to face resistance at 73.19 levels and if it is able to break the same then it may gain up to 73.03 levels followed by 72.85 levels.

The dollar was little changed against most of its major peers on Wednesday but made gains against the yen as upbeat Wall Street earnings turned global sentiment away from safe haven assets. The three main Wall Street indexes each rose by more than two percent as blue-chips delivered strong earnings indicating that the U.S. economic recovery is on track despite the impact of rising interest rates and global trade war tensions. Data on Tuesday showed that U.S. industrial production increased for a fourth straight month in September, boosted by gains in manufacturing and mining output, but momentum slowed sharply in the third quarter. The dollar index, a gauge of its value against six major peers traded flat at 95.08 on Wednesday. The greenback gained 0.13 percent against the Japanese yen on Wednesday, which traded at 112.40 to the dollar. The yen had strengthened over seven out of eight sessions prior to Tuesday and hit a one-month high of 111.61 on Monday. The global meltdown in stocks spurred significant yen gains. The short term outlook for yen is dominated by whether the bounce in share markets over the last 24 hours is a turning point or a pause in a larger sell-off."Market participants are awaiting further cues for the dollar's direction with minutes from the Federal Reserve's September meeting due for release on Wednesday. Investors are looking for clues on many how additional interest rate increases are likely this year. The British pound quoted at 1.3187 on Wednesday, after taking a gain of 0.25 percent versus the dollar on Tuesday. While cable was supported by stronger than expected labor data on Tuesday, investors are still doubtful that the European Union Summit on Wednesday will yield much progress on the Northern Island border issue. On Wednesday, the euro traded slightly higher at 1.1577. The single currency hit as high as 1.1622 it’s highest since Oct. 1 during the previous session, before giving up its gains.