Rupee opened higher, Dollar holding gains vs. major currencies
Tuesday,
11-Aug-2020
10:42 AM (IST)
The Indian rupee opened the day higher at 74.83/84 levels compared to its previous close at 74.8925/9025 levels tracking dollar’s decline against Asian peers. Indian government bond yields little changed before INR150 billion state debt sale and as traders await July headline retail inflation data due tomorrow. Equity markets rose over half a per cent on Tuesday, in line with a strong trend in other Asian indices. At 10:05 AM, the S&P BSE Sensex was trading at 38,451 up 269 point, while the broader Nifty50 was at 11,339 up 69 point. As per the technical indicators range for the USDINR pair may be 74.65-75.05 levels. Rupee has an immediate support at 74.95 levels. A breach of the same may see rupee at 75.03 followed by 75.15 levels. On the positive side rupee is likely to face resistance at 74.77 levels and if it is able to break the same then it may gain up to 74.68 levels followed by 74.58 levels.
The dollar held overnight gains on Tuesday following seven weeks of an almost relentless fall as investors clung to hopes of a bi-partisan stimulus deal in Washington and U.S. bond yields rebounded from multi-month lows. The dollar index jumped back to 93.597 from Friday's two-year low of 92.495. Having fallen for seven straight weeks, the currency was due for a short-term corrective bounce, traders said. The euro changed hands at $1.1741 having eased 0.5% in previous trade. The dollar stood little changed at 105.96 yen. U.S. President Donald Trump on Saturday signed executive orders restoring part of enhanced unemployment payments and suspending payroll taxes. U.S. congressional leaders and Trump administration officials said on Monday they were ready to resume negotiations on a coronavirus aid deal, although it was unclear whether Democrats and Republicans would be able to bridge their differences. On Monday, the S&P500 index (SPX) rose to a five-month high while the yield on 10-year U.S. Treasuries rose to as high as 0.581%, its highest level in more than a week. Investors are also keeping an eye on the rapidly deteriorating relationship between Washington and Beijing. China imposed sanctions on 11 U.S. citizens, including Republican lawmakers, following Washington's sanctions on Hong Kong and Chinese officials. U.S. Treasury Secretary Steven Mnuchin said companies from China and other countries that do not comply with accounting standards will be delisted from U.S. stock exchanges as of the end of 2021. Elsewhere, the Turkish lira stayed near a record low hit on Friday on concerns about the country's depleting foreign reserves, leading to expectations that the central bank may take more decisive action to stem its fall. The lira was quoted at 7.320 per dollar, just above Friday's record low of 7.365. With more wild swings in the Turkish currency expected, implied volatilities, calculated from option prices, have soared, with three-month volatility rising to 26.5%, its highest since April last year.
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