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Rupee opened tad lower, Dollar up vs. major currencies

Friday,   16-Oct-2020   10:45 AM (IST)

The Indian rupee opened the day tad lower at 73.4225/4325 levels compared to its previous close at 73.38/39 levels tracking decline in regional currencies after the dollar index moved higher. However, losses were capped due to gains in local equities. India's federal government bond yields rise as government raises market borrowing by INR1.10 trillion as part of special arrangement to help states bridge shortfall in goods and services tax compensation. Equity markets climbed off the day's top and turned flat in Friday's volatile session. At 10:07 AM, the S&P BSE Sensex was trading at 39,890, up 161 point, while the broader Nifty50 was at 11,711 up 31 point. As per the technical indicators range for the USDINR pair may be 73.05-73.65 levels. Rupee has an immediate support at 73.50 levels. A breach of the same may see rupee at 73.62 followed by 73.75 levels. On the positive side rupee is likely to face resistance at 73.30 levels and if it is able to break the same then it may gain up to 73.15 levels followed by 73.00 levels.

The Dollar is trading higher as investors turned to safe-haven assets over ever surging number of global Covid-19 cases and the U.S. Congress’ continuous stall on passing the latest stimulus measures ahead of the Nov 3 presidential election. The U.S. Dollar Index that tracks the greenback against a basket of other currencies is at 93.81. However, the dollar saw its largest weekly rise since late September as it gained 0.8% so far during the past week. Europe and the U.K. implemented fresh curbs to curb the spread of the virus, and the number of cases in the U.S. also rose, with Midwestern states battling a surge of new cases as temperatures drop. The surge across both sides of the Atlantic triggered fears of fresh lockdowns and worries over the detrimental impact on economic recovery. With 898,000 Americans claiming unemployment over the past week, higher than the 825,000 claims forecast and hitting a two-month high, the data suggested bumps ahead in the road to recovery. Meanwhile, the stalemate over the stimulus measures continues, with Senate Majority Leader Mitch McConnell rejecting an offer by President Donald Trump to raise the price tag on this $1.8 trillion offer. The USD/JPY pair edged down 0.17% to 105.27. However, the safe-have yen recorded a 0.2% rise for the week. The Antipodean risk sensitive currencies were mixed, with the AUD seeing losses, but the NZD reporting gains against the dollar. The AUD/USD pair edged down 0.17% to 0.7080, losing 2% for the week as investors are still digesting dovish comments from the Reserve Bank of Australia. Across the Tasman Sea, the NZD/USD pair inched up 0.05% to 0.6596, with Jacinda Arden widely expected to win the general election taking place on Oct. 17. The USD/CNY pair inched up 0.01% to 6.7420. China’s National People’s Congress Standing Committee is set to adopt a new law restricting sensitive exports vital to national security on Saturday. Once adopted, the law will apply to all companies in China, including foreign-invested ones, and threatens to increase U.S.-China tensions. The GBP/USD pair edged down 0.19% to 1.2889. Roadblocks between the European Union (EU) and the U.K. as they negotiate their Brexit divorce deal saw heavy selling in the pound overnight. U.K. Prime Minister Boris Johnson is due to respond to the EU’s demand for the U.K. to make compromises or prepare for trade disruptions in less than 80 days, later in the day.