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Rupee opened flat, Dollar holding gains vs. major currencies

Thursday,   13-Jun-2019   09:02 AM (IST)

The Indian rupee opened the day flat at 69.35/36 levels compared to its previous close at 69.34/35 levels as fall in Brent crude to below $60 offset by tepid regional cues. Indian government bonds continue to rally, with 10-year benchmark bond yield falling below 7%, as core inflation fell in May, boosting expectation of more rate cuts. Equity markets opened in the negative territory on Thursday amid subdued global cues. At 9:35 AM, the S&P BSE Sensex was trading at 39,642, down 115 point, while the broader Nifty50 was at 11,873, down 33 point. As per the technical indicators range for the USDINR pair may be 69.10-69.60 levels. Rupee has an immediate support at 69.42 levels. A breach of the same may see rupee at 69.52 followed by 69.67 levels. On the positive side rupee is likely to face resistance at 69.25 levels and if it is able to break the same then it may gain up to 69.08 levels followed by 68.89 levels.

The dollar held its gains early on Thursday after rebounding from 11-week lows, as peers such as the euro, pound and commodity currencies sagged due to troubles of their own. The dollar index versus a basket of six major currencies was steady at 96.957 after rising more than 0.3% overnight. The index had dropped to 96.459 on Monday, its lowest since late March, following a sharp decline in long-term U.S. Treasury yields, which fell to near two-year lows last week after a soft U.S. jobs report bolstered expectations for an interest rate cut by the Federal Reserve. Weakness in other currencies, however, underpinned the dollar’s latest bounce despite mounting expectations that the Fed could ease monetary policy in the next few months. The euro took a hit after U.S. President Donald Trump said on Wednesday he was considering sanctions over Russia’s Nord Stream 2 natural gas pipeline project and warned Germany against being dependent on Russia for energy. Sterling slipped as British lawmakers on Wednesday defeated an attempt led by the opposition Labour Party to try to block a no-deal Brexit. Data released on Wednesday showed U.S. consumer prices barely rose in May, pointing to moderate inflation that together with a slowing economy increased pressure on the Fed to lower interest rates this year. The euro was a shade higher at $1.1293 after retreating 0.35% overnight, while the pound stood little changed at $1.2692 following a loss of 0.3% on Wednesday. The dollar was also buoyed as commodity-linked currencies were pressured by a slump in crude oil prices. The Canadian dollar was little changed at C$1.3337 per dollar after shedding roughly 0.5% the previous day. The Australian dollar traded near a 12-day low of $0.6925 plumbed on Wednesday, when it shed 0.45%. Oil prices tumbled 4% on Wednesday to their lowest settlements in nearly five months, weakened by another unexpected rise in U.S. crude stockpiles and by a dimming outlook for global oil demand. The dollar was flat at 108.520 yen, confined to a tight range after ending the previous day unchanged.