Rupee opened tad lower, Dollar lower vs. major currencies

Tuesday,   28-Jul-2020   10:48 AM (IST)

The Indian rupee opened the day tad lower at 74.86/87 levels compared to its previous close at 74.8325/8425 levels with a broad focus on the dollar index ahead of the Fed’s two-day meeting that begins today. Indian bond yields ease but benchmark rate gains to four-week high as government to sell new 10-year bond this week.  Equity markets climbed higher on Tuesday, tracking gains from its Asian peers. At 10:10 AM, the S&P BSE Sensex was trading at 38,064 up 130 point, while the broader Nifty50 was at 11,181 up 49 point. As per the technical indicators range for the USDINR pair may be 74.50-75.00 levels. Rupee has an immediate support at 74.96 levels. A breach of the same may see rupee at 75.04 followed by 75.18 levels. On the positive side rupee is likely to face resistance at 74.74 levels and if it is able to break the same then it may gain up to 74.60 levels followed by 74.51 levels.

The U.S. dollar was down in Asia on Tuesday morning, falling to a two-year low over fresh investor concerns about the U.S. economy’s ability to recover from the impact of COVID-19. The number of global COVID-19 deaths shot past the 650,000 mark, while the number of cases is almost at the 16.4 million mark, as of July 28, according to Johns Hopkins University data. The U.S. Dollar Index that tracks the greenback against a basket of other currencies slipped to 93.91, continuing its slump from the previous sessions. But after Republicans unveiled details of the latest $1 trillion stimulus package on Monday, investors will see whether Republicans and Democrats can reach a consensus to pass the package before some earlier measures due to expire at the end of the week. The euro, which has been on a meteoric rise ever since the EU reached a deal for a EUR750 billion ($879.549 billion) recovery package the week before, also continues to hit the dollar hard. Investors will also be looking to the U.S. Federal Reserve’s meeting on Wednesday, where it is widely expected to take a continuous dovish stance. But some investors were skeptical of the impact any measures announced at the Fed’s meeting would have for the dollar.