Rupee opened flat, Dollar higher vs. major currencies

Monday,   17-Jun-2019   09:08 AM (IST)

The Indian rupee opened the day flat at 69.80/81 levels compared to its previous close at 69.80/81 levels and move down to 69.8850/8950 levels in early deals as upbeat US retail sales data boosts dollar index by most in three months. Indian government bonds little changed in early trade even as crude oil prices gain. Benchmark indices opened Monday's trading session lower, dragged down by Reliance Industries and bank stocks. At 9:44 AM, the S&P BSE Sensex was trading at 39,289, down 163 point, while the broader Nifty50 was at 11,761, down 62 point. As per the technical indicators range for the USDINR pair may be 69.50-70.00 levels. Rupee has an immediate support at 69.97 levels. A breach of the same may see rupee at 70.07 followed by 70.20 levels. On the positive side rupee is likely to face resistance at 69.63 levels and if it is able to break the same then it may gain up to 69.50 levels followed by 69.35 levels.

The dollar hovered near a two-week high early on Monday, as strong U.S. retail sales data tempered some of the fears about a sharp downturn in the world’s largest economy. That provided some relief to the dollar ahead of the Federal Reserve’s policy meeting this week. While few expect the Fed to cut rates at Wednesday’s policy review, traders are wagering that policy makers will do just that in coming months. The dollar index versus a basket of six major currencies was little changed at 97.509 after rising to 97.583 on Friday, its highest since June 3. The index had declined to a 2-1/2-month low of 96.459 a little more than a week ago after a weak U.S. jobs report heightened Fed rate cut prospects. Expectations of an interest rate cut at the Fed’s June 18-19 meeting fell from 28.3% on Thursday to 21.7%. But bets of an easing at the July meeting remain high at 85%. With growth slowing and inflation staying well below the its target, the ECB recently raised the prospect of even more stimulus, arguing that a rate cut or even more asset purchases may become necessary. The central banks of Australia and New Zealand face a similar predicament as the global economy braces for fallout from the U.S.-China trade conflict. Australian bond yields slipped to a record low last week as investors priced in further easing by the Reserve Bank of Australia, which already cut rates to a record low 1.25% earlier this month. The euro was little changed at $1.1216 after shedding about 0.6% on Friday, when it fell to an eight-day trough of $1.1203. The Australian dollar crawled up 0.1% to $0.6878 but remained within reach of a five-month low of $0.6862 set on Friday, when the currency retreated nearly 0.7%. The New Zealand dollar, which slumped more than 1% during the previous session, traded near a three-week low of $0.6488 brushed toward the end of last week. The dollar was flat at 108.570 yen after edging up 0.15% on Friday.