Rupee opened higher, Dollar steady vs. major currencies

Friday,   24-May-2019   09:04 AM (IST)

The Indian rupee opened the day higher at 69.75/76 levels compared to its previous close at 70.01/02 levels after oil prices yesterday suffered their biggest rout of 2019. Brent crude fell 4.6% yesterday amid trade worries and poor US manufacturing data; up 1% at $68.52 in Asia trading. Indian government bonds rise in early trade as Brent crude oil prices slump, boosting hopes of monetary easing in early June. Equity markets opened in the green with benchmark S&P BSE Sensex gaining 300 points at the opening while the broader Nifty50 was testing 11,750 levels. At 9:32 AM, the S&P BSE Sensex was trading at 38,984, up 173 point, while the broader Nifty50 was at 11,711, up 54 point. As per the technical indicators range for the USDINR pair may be 69.20-70.00 levels. Rupee has an immediate support at 70.00 levels. A breach of the same may see rupee at 70.18 followed by 70.35 levels. On the positive side rupee is likely to face resistance at 69.52 levels and if it is able to break the same then it may gain up to 69.35 levels followed by 69.08 levels.

The dollar held steady on Friday, having come off two-year highs on lower U.S. yields in the previous session amid fears that a trade war with China will hurt the U.S. economy more than previously thought. The greenback was not helped by rising expectations for an interest rate cut by the U.S. Federal Reserve later this year to help boost the world’s biggest economy. Against a basket of key rival currencies, the dollar was largely unchanged at 97.906, having fallen from a two-year high of 98.371 overnight. The index is still up 1.8% for the year. On Thursday, President Donald Trump said U.S. complaints against Huawei Technologies Co Ltd might be resolved within the framework of a U.S.-China trade deal, while at the same time calling the Chinese telecommunications giant “very dangerous.” The benchmark 10-year U.S. Treasury note yield was last up slightly at 2.3309%. Overnight, it fell to its lowest since October 2017 after an early read on U.S. manufacturing activity for May posted its weakest pace of growth in almost a decade, suggesting a sharp slowdown in economic growth was underway. Against the yen, the dollar edged up to 109.695 yen, having giving up two-thirds of a percent overnight to record its steepest drop in a single session in two months. The greenback is still 0.6% above a three-month trough of 109.02 yen touched on May 13. The Australian dollar held steady at $0.6904, putting it on track to finish the week with a 0.5% gain, its first positive weekly performance in six weeks. Elsewhere in the foreign exchange market, the euro was flat at $1.1183, having bounced from a two-year low of $1.11055 during the previous session. The single currency came under pressure after a private survey showed activity in Germany’s services and manufacturing sectors fell in May, aggravating fears about the effect of unresolved trade disputes on Europe’s largest economy. Compounding these worries, European parliamentary elections began on Thursday with eurosceptic parties expected to do well, raising concerns about the single currency’s stability.