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Rupee opened higher, Dollar firm vs. major currencies

Wednesday,   15-May-2019   09:02 AM (IST)

The Indian rupee opened the day higher at 70.34/35 levels compared to its previous close at 70.4350/4450 levels as Trump indicates US and China could still reach a deal, boosting regional equities. Indian government bonds trading slightly higher on hopes of liquidity infusion after RBI announces second scheduled open market purchase of bonds. Equity markets extended Tuesday's gains during the early trade with both the indices trading higher. At 9:34 AM, the S&P BSE Sensex was trading at 37,389, up 71 point, while the broader Nifty50 was at 11,247, up 25 point. As per the technical indicators range for the USDINR pair may be 69.90-70.50 levels. Rupee has an immediate support at 70.49 levels. A breach of the same may see rupee at 70.61 followed by 70.75 levels. On the positive side rupee is likely to face resistance at 70.19 levels and if it is able to break the same then it may gain up to 70.05 levels followed by 69.85 levels.

The dollar was firmer in early Asian trade on Wednesday while the Australian dollar brushed a more than four-month low as traders eyed Chinese and European data for clues on whether the worst is over for the global economy. The dollar was supported as trade issues remained front-and-center of investors' minds after U.S. and Chinese officials had said the two countries would continue to negotiate on trade. U.S. President Donald Trump insisted on Tuesday that trade talks with China had not collapsed and called the U.S.-China trade war "a little squabble". The dollar index against a basket of six key rivals was steady at 97.542, having risen 0.2% during the previous session. Market participants are now focused on data out of China and Europe to provide the latest pointers on the state of the global economy. In the spotlight on Wednesday are Chinese industrial production and retail sales for April, due at about 0200 GMT. Later in the global day, focus turns to euro zone and German gross domestic product reports and U.S. retail sales and industrial product for April for further cues on global growth. The euro was last a shade lower at $1.1203. The single currency ended the previous session lower after Italy's deputy prime minister said the country is ready to break European Union budget rules on debt levels if necessary to boost employment. The Australian dollar gave up a quarter of a percent to $0.6928, falling to its lowest since early January ahead of the release of the Chinese data. The Aussie is often seen as a proxy for Chinese growth because of Australia's export-reliant economy and China being the country's main destination for its commodities. That sentiment was echoed by Bart Wakabayashi, Tokyo branch manager at State Street Bank, who said investors continued to view the Australian market as being reliant on China. In the commodity market, U.S. crude and Brent crude futures were both down after the American Petroleum Institute reported a bigger-than-expected build in crude oil inventory.