Rupee opened steady, Dollar under pressure vs. major currencies

Tuesday,   19-Mar-2019   09:06 AM (IST)

The Indian rupee opened the day steady at 68.55/56 levels compared to its previous close at 68.5275/5375 levels and moved up to 68.42/43 levels in early deals on broad dollar weakness before two-day Fed meeting. Indian government bonds open slightly lower amid profit taking ahead of state debt supply today and federal government bond auction later this week. The benchmark indices opened flat with a positive bias. At 9:30 AM, the S&P BSE Sensex was trading at 38,142, up 47 points, while the broader Nifty50 was at 11,476, up 14 point. As per the technical indicators range for the USDINR pair may be 68.20-68.80 levels. Rupee has an immediate support at 68.79 levels. A breach of the same may see rupee at 69.12 followed by 69.29 levels. On the positive side rupee is likely to face resistance at 68.29 levels and if it is able to break the same then it may gain up to 68.12 levels followed by 67.90 levels.

The dollar was under pressure on Tuesday, weighed by growing expectations the Federal Reserve would shift to a more accommodative policy stance this week and concerns about slower U.S. economic growth. The dollar index, which measures the greenback against a basket of six major currencies, was a shade lower at 96.495, hovering close to a two-week low. The index has lost 1.2 percent after hitting a three-month high of 97.710 on March 7. The dollar has weakened in recent sessions on growing expectations the Fed will strike a dovish tone at its two-day policy meeting due to start later on Tuesday. Many investors expect the Fed, which has raised rates four times last year, to keep its benchmark overnight interest rate unchanged and stick to its pledge of a "patient" approach to monetary policy. As the dollar took a breather, other major currencies advanced by default. The yen rose 0.1 percent to 111.27 yen per dollar, extending its gains to a third session. Sterling also gained, rising 0.1 percent to $1.3268. It had seesawed overnight after the speaker of Britain's parliament said Prime Minister Theresa May's Brexit deal could not be voted on again unless a different proposal was submitted. The Bank of England is expected to leave its interest rate outlook unchanged at a policy meeting on Thursday due to the deep uncertainty over Britain's decision to leave the European Union. The euro was down a tad at $1.1335. Investors' focus on Tuesday was also on Germany's ZEW economic index for March, due for release around 1000 GMT. The German economy, Europe's largest, barely avoided recession in the final quarter of last year, as the negative impact from global trade disputes and Brexit weighed on a decade of expansion.