Rupee opened lower, Yen gains vs. Dollar

Monday,   18-Jan-2021   10:40 AM (IST)

The Indian rupee opened the day lower at 73.2150/2250 levels compared to its previous close at 73.07/08 levels as equities extend losses, boosting safe haven dollar. India's government bond yields marginally lower in early trade as central bank will purchase INR100 billion of bonds, including benchmark note, on Jan. 21. Indian shares trading lower on Monday, as information technology shares extended fall after hitting record highs, while HDFC Bank shares rose after strong quarterly results. At 10:28 AM, the S&P BSE Sensex was trading at 48,665 down 370 point, while the broader Nifty50 was at 14,304 down 129 point. As per the technical indicators range for the USDINR pair may be 73.00-73.45 levels. Rupee has an immediate support at 73.27 levels. A breach of the same may see rupee at 73.38 followed by 73.50 levels. On the positive side rupee is likely to face resistance at 73.05 levels and if it is able to break the same then it may gain up to 72.91 levels followed by 72.85 levels.

The dollar clung to gains on Monday and the Japanese yen edged higher as softening U.S. economic data and rising global coronavirus cases kept investors cautious, while lockdowns and Italian political turmoil held the euro under pressure. The euro dipped to a six-week low of $1.2066 in Asia and fell to a one-month low of 125.20 yen. The yen was last up about 0.2% at 103.70 per dollar and it also rose on the risk-sensitive Australian and New Zealand dollars. The Antipodeans were soft against the greenback and the Aussie touched a one-week trough of $0.7679, while the kiwi hit a three-week low of $0.7117. Better-than-expected Chinese economic data headed off further selling, but was not enough to shift currency traders' mood. safety bid has added another layer of support for the dollar since the Democrats won control of U.S. Congress a fortnight ago, which triggered a surge in yields as investors priced in bigger stimulus from a borrow-and-spend Biden administration. The mood soured after Friday data showed U.S. retail sales fell for a third straight month in December, stoking worries that the recovery is running into trouble as health authorities warned that the worst of the latest COVID-19 wave might be yet to come. is also facing surging cases and an Italian government that must survive crucial votes in parliament on Monday and Tuesday in order to cling to power. dollar index steadied after touching a one-month high and last traded at 90.827. Sterling on Monday sat near at a one-week low of $1.3567. Nevertheless, many investors appear to be sticking in crowded dollar shorts, which hit an almost 10-year high last week, even though the bounce has carried the dollar index about 1.9% higher and pushed the euro more than 2% lower in two weeks. Elsewhere, the Canadian dollar slipped 0.2% after reports that Joe Biden plans to soon rescind permission for the Keystone XL pipeline, a project which would link oil sands in Alberta to refineries in Texas. in the week, President-elect Biden is due to be inaugurated in a heavily-guarded Washington. Tensions are high after mob violence a few weeks ago. Biden's pick for Treasury Secretary, Janet Yellen, is expected to rule out seeking a weaker dollar when testifying on Capital Hill on Tuesday, the Wall Street Journal reported.