Rupee opened higher, Dollar lower vs. major currencies

Friday,   31-Jul-2020   10:49 AM (IST)

The Indian rupee opened the day higher at 74.7450/7550 levels compared to its previous close at 74.84/85 levels as dollar extends losses amid uncertainty over US economic rebound. Indian government bond yields were trading marginally lower in early session ahead of auction of new 10-year note. Equity markets fluctuated between gains and losses in a volatile start today. At 10:40 AM, the S&P BSE Sensex was trading at 37,718 down 18 point, while the broader Nifty50 was at 11,105 up 3 point. As per the technical indicators range for the USDINR pair may be 74.50-75.00 levels. Rupee has an immediate support at 74.83 levels. A breach of the same may see rupee at 74.95 followed by 75.10 levels. On the positive side rupee is likely to face resistance at 74.70 levels and if it is able to break the same then it may gain up to 74.58 levels followed by 74.45 levels.

The dollar was down on Friday morning, touching two-year lows and on its way to posting its biggest monthly decline in a decade as fresh doubts over the U.S economy’s recovery from the COVID-19 pandemic creep in. These doubts have led investors to question the dollar’s strength. Data released on Thursday showed that the U.S. economy contracted by 32.9% in the second quarter and that 1.434 million unemployment claims were submitted in the week ending July 25. On the political front, Republicans and Democrats are also no closer to reaching consensus on the latest stimulus measures, with only one more day left before some earlier measures expire on Friday. Ever-rising numbers of COVID-19 cases also continue to pose a challenge to the U.S.’ economic recovery. The country reported almost 4.5 million cases as of July 31, according to Johns Hopkins University data, and continues to hold the dubious honor of recording the highest number of COVID-19 cases globally. Meanwhile, U.S. President Donald Trump added to the dollar’s woes on Thursday after he floated the idea of delaying the U.S. presidential elections, currently scheduled for November 3. But the proposal was immediately rejected by Congress, the sole governmental authority that could make such a change.