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Rupee opened lower, Dollar down vs. major currencies

Wednesday,   16-Sep-2020   10:41 AM (IST)

The Indian rupee opened the day lower at 73.6950/7050 levels compared to its previous close at 73.6450/6550 levels as importer covering offset the impact of a broad advance in regional currencies ahead of the Federal Reserve’s policy decision. Indian federal government bond yields largely unchanged as traders await fresh monetary and fiscal triggers. Equity markets were trading flat with a positive bias, tracking mixed cues from their Asian peers. At 10:06 AM, the S&P BSE Sensex was trading at 39,111, up 66 point, while the broader Nifty50 was at 11,543 up 21 point. As per the technical indicators range for the USDINR pair may be 73.20-73.85 levels. Rupee has an immediate support at 73.79 levels. A breach of the same may see rupee at 73.95 followed by 74.10 levels. On the positive side rupee is likely to face resistance at 73.45 levels and if it is able to break the same then it may gain up to 73.25 levels followed by 73.01 levels.

The dollar was down on Wednesday in Asia, with investors fine-tuning their positions ahead of a U.S. Federal Reserve policy meeting. The U.S. Dollar Index Futures that tracks the greenback against a basket of other currencies inched down to 93.04, giving up some earlier gains. The USD/JPY pair was down 0.15% to 105.28. The Fed will meet later in the day to hand down its policy decision, its first meeting since Fed Chairman Jerome Powell announced a more relaxed approach to inflation at the Jackson Hole symposium on August 27. It is widely expected that the stance, widely expected to be continued, could weaken the greenback with the introduction of further stimulus measures. However, some investors disagreed with those expectations. The policy decision is also expected to introduce longer tenors for the Fed’s bond-buying program. Another area of interest to investors are the Fed’s economic projections, particularly on inflation and its direction. The Bank of Japan and Bank of England will also hand down their respective policy decisions on Thursday. The AUD/USD pair edged up 0.12% to 0.7309 and the NZD/USD pair inched up 0.01% to 0.6722. The Yuan continued to bask in the wake of Tuesday’s economic data indicating growth in industrial production and retail sales year-on-year, as well as pointing to China’s continuous economic recovery from COVID-19. The data also boosted investor hopes for a global recovery from the pandemic. The pound rose on the back of Tuesday’s better-than-expected job figures, as well as opposition to a bill proposing to break the U.K.’s Brexit treaty with the European Union (EU). The U.K. will release a slew of data for August, including the consumer price index, later in the day.