Rupee opened higher, Dollar lower vs. major currencies

Friday,   27-Mar-2020   09:16 AM (IST)

The Indian rupee opened the day higher at 74.64/65 levels compared to its previous close at 75.15/16 levels as dollar index falls by the most in more than four years following jump in Americans filing for unemployment benefits. India's federal bonds jump in early trade, with 10-year benchmark note at over one-week high, as traders expect RBI Governor Shaktikanta Das to announce measures, including a rate cut, at his address at 10:00 am today. Indian equity markets surged, lifted by bank stocks, on Friday ahead of the 10 AM press conference by RBI Governor. At 9:42 AM, the S&P BSE Sensex was trading at 31,059, up 1112 point, while the broader Nifty50 was at 9,020 up 378 point. As per the technical indicators range for the USDINR pair may be 74,40-75.20 levels. Rupee has an immediate support at 75.10 levels. A breach of the same may see rupee at 75.32 followed by 75.65 levels. On the positive side rupee is likely to face resistance at 74.47 levels and if it is able to break the same then it may gain up to 74.36 levels followed by 74.00 levels.

The dollar is on track for its biggest weekly fall in more than a decade on Friday as a series of stimulus steps around the world, including a $2.2 trillion U.S. package, calmed a panic over a global recession following the coronavirus outbreak. Data showing an unprecedented rise in U.S. jobless claims underscored the virus' devastating impact on the economy, but subsequent rise in Wall Street shares raised hopes a torrent of selling in risk assets may have run its course for now. The dollar dropped to 109.42 yen, shedding 1.44% overnight while the euro also jumped 1.40% on Thursday and last stood at $1.1025. The biggest mover among major currencies was sterling, which rose 2.8% overnight before giving up part of that gain in early Asian trade. The British pound last stood at $1.2183. An easing in dollar funding conditions is helping to reduce demand for the dollar. The number of Americans filing claims for unemployment benefits surged to a record of more than 3.28 million last week as strict measures to contain the coronavirus pandemic unleashed a wave of layoffs. While that eclipsed the previous record of 695,000 set in 1982 and was up 3 million from last week, it was below investors' worst fears. The focus stayed on an unprecedented $2.2 trillion stimulus expected to be approved by the U.S. House of Representatives on Friday. The dollar's index against six other major currencies lost 1.5%, its biggest daily fall in almost four years. So far this week it is down 2.9%. If sustained by the end of U.S. trade, that would mark the biggest weekly decline since 2009, underscoring the currency market's extreme volatility after last week racking up its biggest weekly gain since the global financial crisis more than a decade ago. Highly choppy trade could continue towards the end of month, when there tend to be large flows from corporate and investors to hedge their currency exposures. In particular, many asset managers may need to adjust their currency hedge positions after wild swings in global share prices. The dollar's rises until last week, in particular against the Australian dollar and the New Zealand dollar were primarily driven by such currency hedge adjustment, said analysts at National Bank of Australia in report. The Australian dollar traded at $0.6068, having gained more than 10% from its 17-year low of $0.5510 touched on Thursday last week. The New Zealand dollar stood at $0.5974.