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Rupee opened lower, Dollar holding gains vs. major currencies

Tuesday,   12-Jan-2021   10:54 AM (IST)

The Indian rupee opened the day lower at 73.4225/4325 levels compared to its previous close at 73.38/39 levels as dollar index heads for fifth daily advance, buoyed by Treasury yields.  India's federal government bond yields almost flat, despite rise in U.S. Treasury yields, as investors await local retail inflation data due after market today. The Indian equity markets were trading flat on Tuesday, after erasing opening losses. At 10:08 AM, the S&P BSE Sensex was trading at 49,182 down 88 point, while the broader Nifty50 was at 14,480 down 5 point. As per the technical indicators range for the USDINR pair may be 73.25-73.60 levels. Rupee has an immediate support at 73.48 levels. A breach of the same may see rupee at 73.56 followed by 73.65 levels. On the positive side rupee is likely to face resistance at 73.33 levels and if it is able to break the same then it may gain up to 73.24 levels followed by 73.15 levels.

The dollar held four days of gains against major peers on Tuesday as the prospect of massive fiscal stimulus pushed U.S. yields higher. President-elect Joe Biden, who takes office on Jan. 20 with his Democratic party in control of both Houses, has promised "trillions" in extra pandemic-relief spending. dollar index has rebounded from a nearly three-year low reached last week as the benchmark 10-year U.S. Treasury yield topped 1% for the first time since March and rose as high as 1.148% overnight. The support from rising yields has so far trumped worries that the extra spending could trigger faster inflation, which ordinarily would make the greenback less attractive. Many analysts expect the U.S. currency to resume the decline that saw the dollar index lose close to 7% in 2020 amid better risk sentiment stimulus spending and vaccine rollouts brighten the global economic outlook. Speculators in the FX market are extremely bearish on the dollar, U.S. Commodity Futures Trading Commission data released on Friday showed. dollar index was little changed at 90.514 in early Asian trading, having risen as high as 90.73 overnight for the first time since Dec. 21. It dipped to 89.206 on Jan. 6, a level not seen since March 2018. The greenback slipped 0.1% to 104.175 yen, after rising to a one-month high of 104.40 on Monday. The euro was largely steady at $1.2151 after slipping to 1.21320 in the previous session for the first time since Dec. 21. Meanwhile, bitcoin was trading below $35,000 as its red-hot rally has faltered since it soared to an all-time high of $42,000 on Jan. 8. bid prices at 9:40AM (040 GMT) Description.