Rupee opened higher, Dollar eased vs. major currencies

Tuesday,   24-Mar-2020   09:08 AM (IST)

The Indian rupee opened the day higher at 76.07/08 levels compared to its previous close at 76.22/25 levels on broad dollar decline after Fed announces open-ended quantitative easing. Indices are trading off highs. India federal bonds opened higher in very thin volume after Fed promises it will expand asset purchases as much as needed to support U.S. economy amid novel coronavirus outbreak. At 9:51 AM, the S&P BSE Sensex was trading at 26,009, up 28 point, while the broader Nifty50 was at 7,613 up 3 point. As per the technical indicators range for the USDINR pair may be 75.50-76.50 levels. Rupee has an immediate support at 76.25 levels. A breach of the same may see rupee at 76.43 followed by 76.63 levels. On the positive side rupee is likely to face resistance at 75.86 levels and if it is able to break the same then it may gain up to 75.48 levels followed by 75.29 levels.

The dollar eased on Tuesday but remained near a three-year high against a basket of currencies as investors sought the world's main funding and settlement currency ahead of a sharp anticipated fall in cashflow. Market reaction was mixed to the U.S. Federal Reserve's extraordinary array of programs, its third emergency move this month. The dollar index stood at 102.14, having dipped 0.3% on Monday but still not far from Friday's peak of 102.99, its highest level since January 2017. Against the yen, the dollar traded at 110.95 yen, having hit a one-month high of 111.59. The euro ticked up to $1.0752 after touching a near three-year low of $1.0636 in the previous session. The British pound stood at $1.1548, up 0.3% in early trade though it remained near its 35-year low of $1.1413 set last week. The Fed announced unlimited quantitative easing and programs to support credit markets on Monday in a drastic bid to backstop an economy reeling from emergency restrictions on commerce. The program includes purchases of corporate bonds, guarantees for direct loans to companies and a plan to get credit to small and medium-sized business. While the move is likely to mitigate the blow for many companies in the long-run, investors remained on edge amid uncertainty about the extent of the pandemic. Wall Street's slide deepened on Monday as the rapidly spreading coronavirus forced more U.S. states into lockdown while Washington's fiscal stimulus package remained stalled in the Senate. Trading remained volatile, with the Australian dollar rising 0.75% to $0.5873, extending its recovery from a 17-year low of $0.5510 touched last week. Market players are looking to a raft of business sentiment surveys in Europe due later in the day for a glimpse of how the virus is affecting the real economy.