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Rupee opened higher, Dollar down vs. major currencies

Monday,   23-Nov-2020   10:47 AM (IST)

The Indian rupee opened the day higher at 74.13/14 levels compared to its previous close at 74.16/17 levels on broad dollar decline and upbeat shares. However, bets that the central bank will cap an upside in the local unit offset the impact of upbeat risk appetite. Currently, Rupee slips to 74.22/23 levels (10:40 am). India's federal government bond yields little changed ahead of debt switch auction. Equity markets were trading firm, up half a per cent, in Monday's early deals, on the back of favourable global cues. At 10:14 AM, the S&P BSE Sensex was trading at 43,936, up 54 point, while the broader Nifty50 was at 12,877 up 18 points. As per the technical indicators range for the USDINR pair may be 73.85-74.35 levels. Rupee has an immediate support at 74.22 levels. A breach of the same may see rupee at 74.31 followed by 74.45 levels. On the positive side rupee is likely to face resistance at 74.08 levels and if it is able to break the same then it may gain up to 73.94 levels followed by 73.85 levels.

The dollar was down on Monday morning in Asia, with optimism over a potential early rollout of COVID-19 vaccines offset by global economic restrictions to curb the spread of the virus. The U.S. Dollar Index, which tracks the greenback against a basket of other currencies slipped to 103.145. The FDA is looking to grant approval in mid-December for distribution of BNT162b2, the vaccine candidate produced by Pfizer Inc and German partner BioNTech, chief scientific adviser for “Operation Warp Speed” Moncef Slaoui said. The first people in the U.S. could be inoculated a day after the approval. The U.K. could also grant regulatory approval to BNT162b2 this week. However, millions of Americans are expected to flout warnings to stay home for the upcoming Thanksgiving holiday, raising fears that the mass movement could increase the number of second wave cases in the country exponentially. Across the Atlantic, Germany, dealing with its own second wave, could see its current lockdown extended until mid-December. The lack of consensus in the U.S. Congress concerning a deal on the latest stimulus measures has also led to speculations that the Federal Reserve could ease monetary policy even further. The spat between the Fed and the Treasury Department over the termination of some emergency lending programs during the previous week also fed this speculation. The minutes of the Fed’s last policy meeting, to be released on Wednesday, will now be scrutinized for confirmation that Fed policymakers discussed adding to the central bank’s asset-buying plans. Japanese markets are closed for a holiday, resulting in sparse liquidity and investor reluctance to test major chart barriers on several dollar pairs. Meanwhile, the euro edged up against the dollar, but continues a struggle to break above the $1.993 resistance level that it also failed to breach during the previous week. However, some investors remain bullish on the single currency’s longer-term outlook. The note also raised its forecasts for the euro, now seeing it at $1.2500 by the end of 2021 and $1.3000 at the close of 2022, against the previous $1.2000 and $1.2500 respectively.