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Rupee opened lower, Dollar lower vs. major currencies

Monday,   05-Nov-2018   09:07 AM (IST)

The Indian rupee opened the day lower at 72.80/81 levels compared to its previous close at 72.4350/4450 levels tracking Asian peers due to strong U.S. jobs data that bolstered expectations of faster rate hikes there. Oil prices fell on Monday as the start to U.S. sanctions against Iran's fuel exports was softened by waivers that will allow some countries to still import Iranian crude, at least temporarily. Indian government bonds fall as weaker rupee, rise in U.S. Treasury yields weighs on appetite following stronger-than-expected U.S. jobs data. It’s a negative start to the week, with the Nifty trading around one-third of a percent lower. At 09:20 am the Sensex is down 71.27 points or 0.20% at 34940.38, while the Nifty is lower by 37.60 points or 0.36% at 10515.40. As per the technical indicators range for the USDINR pair may be 72.60-73.20 levels. Rupee has an immediate support at 73.00 levels. A breach of the same may see rupee at 73.21 followed by 73.40 levels. On the positive side rupee is likely to face resistance at 72.74 levels and if it is able to break the same then it may gain up to 72.60 levels followed by 72.47 levels.

The dollar lost ground against most of its major peers on Monday, as growing expectations of an orderly Brexit bolstered the pound, euro and broader global investor sentiment. A Sunday Times report that an all-UK customs deal will be written into the agreement governing Britain's withdrawal from the EU cheered investors who sent the pound to $1.3062 on Monday, the highest since Oct. 22.The dollar index traded marginally lower at 96.45 due to the gains in the euro and pound, which together make up around 70 percent of the index. However, analysts think dollar strength will return as investors shift focus back to expectations for tighter U.S. monetary policy following stronger-than-expected economic data late last week. Analysts see the Federal Reserve on track to raise interest rates in December, followed by another two hikes by mid-2019.Data released on Friday showed that U.S. jobs growth rebounded sharply in October and wages recorded their largest annual gain in 9-1/2 years. U.S. 10-year Treasury yields traded at 3.2 percent on Monday, having risen on Friday on the back of the jobs report. That is expected to help the dollar firm against the safe haven Japanese yen, which traded flat at 113.18 on Monday. The dollar weakened by 0.66 percent versus the yen in the month of October as news flow around trade tensions, geopolitical risks and a global economic slowdown gave the Japanese currency a flight-to-safety bid. Despite Brexit relief supporting risk appetite in currency markets, the UK's Telegraph newspaper reported that significant hurdles still remain for the negotiation process. The pound retraced its intra-day high in early thin Asian trade, but was up 0.3 percent for the day. It has lost 3.7 percent versus the greenback year to date. The positive sentiment around a smooth Brexit also gave the euro a small bid in early Asian trade. The single currency gained 0.11 percent and changed hands at $1.1396.The offshore Yuan traded stronger versus the dollar at 6.8948. The Yuan gained in the last two trading sessions versus the greenback in offshore trading, supported by rising hopes that trade tension between China and the United States will ease.