Rupee opened higher, Dollar higher vs. major currencies

Wednesday,   19-Jun-2019   09:08 AM (IST)

The Indian rupee opened the day higher at 69.56/57 levels compared to its previous close at 69.70/71 levels on US-China trade hopes and ECB easing signal. Indian federal government bonds fall on profit booking and as crude oil prices rise. Benchmark indices opened higher on strong global cues. At 9:40 AM, the S&P BSE Sensex was trading at 39,385, up 339 point, while the broader Nifty50 was at 11,794, up 102 point. As per the technical indicators range for the USDINR pair may be 69.25-69.75 levels. Rupee has an immediate support at 69.65 levels. A breach of the same may see rupee at 69.76 followed by 69.94 levels. On the positive side rupee is likely to face resistance at 69.44 levels and if it is able to break the same then it may gain up to 69.25 levels followed by 69.07 levels.

The dollar held near a two-week high early on Wednesday ahead of the Federal Reserve’s closely-watched policy decision later in the day, supported by a surprisingly dovish European Central Bank and bearish eurozone economic data. The dollar index versus a basket of six major currencies was steady at 97.615 after climbing to 97.766 on Tuesday, its highest level since June 3. Focus was on whether the greenback can retain its strength after the Fed’s two-day policy meeting ends later on Wednesday. The Fed is widely expected to stand pat on monetary policy this time but open the door for an interest rate cut at the next meeting in July. The prospect of the U.S. central bank lowering rates has also driven benchmark Treasury yields to near two-year lows while boosting equity prices. The euro was steady at $1.1198 after shedding 0.2% overnight, when it brushed a 15-day trough of $1.1181. The common currency dropped along with a decline in German government bond yields, which hit a new record low on Tuesday, after ECB chief Mario Draghi said the bank will need to ease policy again if inflation doesn’t head back to its target. A closely watched survey by the ZEW Institute showing that the mood among German investors had deteriorated sharply in June also weighed on the euro. The Australian dollar was a shade higher at $0.6884 after mounting a rebound the previous day, when it pulled away from a 5-1/2-month low of $0.6832 set on growing expectations that the Reserve Bank of Australia may have to cut rates again. The Aussie, along with the Chinese yuan, got a lift on Tuesday as China and the United States rekindled trade talks ahead of a meeting next week between Presidents Donald Trump and Xi Jinping. The Chinese yuan extended overnight gains in offshore trade to reach 6.8953 per dollar, its strongest since May 14. The dollar gained 0.1% to 108.555 yen after losing modest ground overnight.