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Rupee opened higher, Dollar down vs. major currencies

Thursday,   26-Nov-2020   10:43 AM (IST)

The Indian rupee opened the day higher at 73.8250/8350 levels compared to its previous close at 73.91/92 levels after a disappointing U.S. job market data led to further weakness in the dollar index. Indian government bond yields little changed in early session, as market participants await outcome of special open market operation today, and auction of new 10-year note tomorrow. Equity markets gave up their opening gains and slipped into the red in Thursday's volatile trade ahead of the expiry of November series derivative contracts. At 10:12 AM, the S&P BSE Sensex was trading at 43,722, down 106 point, while the broader Nifty50 was at 12,830 down 28 points. As per the technical indicators range for the USDINR pair may be 73.65-74.05 levels. Rupee has an immediate support at 73.94 levels. A breach of the same may see rupee at 74.08 followed by 74.18 levels. On the positive side rupee is likely to face resistance at 73.80 levels and if it is able to break the same then it may gain up to 73.72 levels followed by 73.60 levels.

The dollar was down on Thursday morning in Asia, subdued by weak U.S. economic data but with lingering optimism over the development of a COVID-19 vaccine leading investors to riskier assets tied to global commodities and emerging markets. The U.S. Dollar Index that tracks the greenback against a basket of other currencies inched down 0.09% to 91.918, its lowest level in more than two months. It was also close to its weakest in more than two months against the euro. The dollar also took a hit after data released on Wednesday showed that the U.S.’s GDP grew 33.1% quarter-on-quarter during the third quarter, just missing the 33.1% growth in forecasts prepared by Investing.com but unchanged from the second quarter. The data also showed 778,000 jobless claims for the past week, higher than the forecast 730,000 claims and the 748,000 claims submitted during the previous week. There were grim warnings that even more job losses could be on the way, with many states re-imposing restrictive measures to curb the spiking number of COVID-19 cases. The number of global COVID-19 cases surpassed 60 million as of Nov. 26, of which over 12.7 million are U.S. cases, according to Johns Hopkins University data. Positive data for three vaccine candidates’ efficacies, and signs that a transition to the Joe Biden administration in the U.S., saw a recent turn towards riskier currencies and emerging market assets. Although the dollar’s subsequent fall was rapid enough to open the possibility of a rebound in the short term, some investors warned that a longer-term decline could be possible and are already shifting their positions in anticipation of the COVID-19 outbreak waning in 2021. The AUD traded near its highest since September, boosted by improved risk appetite and strong demand in China for Australian commodities exports. Meanwhile, the NZD was trading near its strongest level in over two years. Investors will monitor the onshore yuan to see if the yuan moves towards the 29-month high seen during the previous week. The pound was near its strongest level against the dollar since Sep. 2, while holding steady against the euro. Investors await details on the Brexit trade talks between the U.K. and the European Union this week. The Asian session saw small moves overall as the U.S. markets close for the Thanksgiving holiday.