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Rupee opened higher, Dollar rose vs. major currencies

Monday,   11-Feb-2019   09:15 AM (IST)

The Indian rupee opened the day higher at 71.23/24 levels compared to its previous close at 71.30/31 levels amid dollar sales by large private sector bank, probably on behalf of exporters. Onshore Yuan, resuming trade after last week’s Lunar New Year holidays is down 0.6% at 6.7740 to dollar. The benchmark indices began on a weak note amid weakness in the Asian market. At 9:30 AM, the S&P BSE Sensex was trading at 36,400, down 146 points, while the broader Nifty50 was ruling at 10,890, down 54 points. Indian government bonds trading little changed after opening higher, as traders await local retail inflation data due tomorrow. As per the technical indicators range for the USDINR pair may be 70.85-71.65 levels. Rupee has an immediate support at 71.46 levels. A breach of the same may see rupee at 71.63 followed by 71.84 levels. On the positive side rupee is likely to face resistance at 71.07 levels and if it is able to break the same then it may gain up to 70.86 levels followed by 70.69 levels.

The dollar rose against most other currencies on Monday, holding near a six-week high as fresh worries about U.S.-Sino trade tensions and global growth drove appetite for safe-haven assets. U.S. negotiators will this week press China on longstanding demands that it reform how it treats U.S. companies' intellectual property in order to seal a trade deal that could prevent tariffs from rising on Chinese imports. The dollar gained 0.1 percent versus the yen to 109.82. However, traders expect moves in dollar/yen to be small on Monday as Japanese markets remain shut for a public holiday. The dollar index, a gauge of its value versus six major peers, was marginally higher at 96.64, on track for its eighth straight day of gains. Trade tensions between the world's two largest economies have been a major driver of global investor sentiment over the past year. Market confidence took a hit last week when U.S. President Donald Trump said he did not plan to meet with Chinese President Xi Jinping before a March 1 deadline set by the two countries to achieve a trade deal. Trump has vowed to increase U.S. tariffs on $200 billion worth of Chinese imports to 25 percent from 10 percent currently if the two sides cannot reach a deal by March 2. The euro was marginally lower versus the greenback at $1.1322 in early Asian trade while the Aussie was 0.15 percent higher at $0.7099, after a disastrous week in which it lost 2.2 percent. The strength in the dollar has come despite the Federal Reserve taking a dovish stance at its last policy meeting in January. For now, investors are piling into the safety of the greenback due to fears of a sharp global economic slowdown. The euro came under pressure as core European government debt yields touched their lowest in over two years. The single currency has lost 2.5 percent so far this month. Benchmark German yields were just 10 basis points away from zero percent. The European Commission sharply cut on Thursday its forecasts for euro zone economic growth for this year and next with the bloc's largest economies expected to be held back by global trade tensions and domestic challenges. Last month, the International Monetary Fund also downgraded its forecasts for global growth. Elsewhere, sterling was down 0.1 percent at $1.2935. Traders expect the pound to remain volatile amid heightened political uncertainty over the Brexit process.