Rupee opened higher, Dollar higher vs. Yen

Monday,   14-Oct-2019   09:02 AM (IST)

The Indian rupee opened the day higher at 70.8825/8925 levels compared to its previous close at 71.02/03 levels as US and China reach preliminary trade deal, boosting Asian currencies and equities. Indian government bonds turn higher after benchmark note fell to a two-week low in early trade, as some dealers cover short positions in thin-volume session. Domestic indices were trading in the green in the early morning deals. At 9:40 AM, the S&P BSE Sensex was trading at 38,217, up 90 point, while the broader Nifty50 was at 11,331, up 26 point. As per the technical indicators range for the USDINR pair may be 70.60-71.10 levels. Rupee has an immediate support at 71.00 levels. A breach of the same may see rupee at 71.10 followed by 71.25 levels. On the positive side rupee is likely to face resistance at 70.75 levels and if it is able to break the same then it may gain up to 70.65 levels followed by 70.50 levels.

The dollar held near a 2 1/2-month high against the yen on Monday after Washington and Beijing announced progress toward a trade deal, while sterling hovered near a three-month peak on hopes for an orderly British exit from the European Union. On Friday, the dollar strengthened against the safe-haven yen to as much as 108.63 yen, its highest level since August 1, before U.S. President Donald Trump said the United States and China had reached a 'Phase 1' trade deal. It pared those gains after Trump announced the agreement, covering agriculture, currency and some aspects of intellectual property protections. In early Asian trade on Monday, the dollar inched down to 108.36 yen against the yen, while the euro stood at $1.1025 versus the greenback, off Friday's three-week high of $1.10625. Tokyo's market is closed for a public holiday on Monday, so trading volumes are likely to lighter than usual. The deal represents the biggest step between the United States and China in a 15-month trade dispute. Friday's announcement did not include many details and Trump said it could take up to five weeks to get a pact written. He acknowledged the agreement could fall apart during that period, though he expressed confidence that it would not. The British pound surged on Friday to as high as $1.2708, its strongest level since July 1, and a five-month peak of 86.955 pence per euro, on optimism about orderly Brexit. The pound was last down 0.38% at $1.2600 in Asia. The EU agreed on Friday to hold another round of intense negotiations with London in a bid to break the deadlock and secure a deal before the Oct. 31 deadline. EU negotiator Michel Barnier and his British counterpart Stephen Barclay earlier held what both sides called a "constructive" meeting in Brussels.