Rupee opened higher, Dollar down vs. major currencies

Thursday,   21-Jan-2021   10:38 AM (IST)

The Indian rupee opened the day higher at 72.9550/9650 levels compared to its previous close at 73.03/04 levels as bets of more supportive polices by new US administration lifts risk appetite, hurts dollar. India's government bond yields flattish ahead of central bank’s bond purchase which includes benchmark paper. Indian shares rose to a record high on Thursday, with the benchmark index scaling the 50,000 level for the first time, boosted by heavyweight Reliance Industries after the country's stock exchanges approved its deal with Future Group. At 10:15 AM, the S&P BSE Sensex was trading at 50,072 up 280 point, while the broader Nifty50 was at 14,728 up 84 point. As per the technical indicators range for the USDINR pair may be 72.80-73.20 levels. Rupee has an immediate support at 73.05 levels. A breach of the same may see rupee at 73.16 followed by 73.25 levels. On the positive side rupee is likely to face resistance at 72.90 levels and if it is able to break the same then it may gain up to 72.82 levels followed by 72.71 levels.

The dollar was down on Thursday morning in Asia. The U.S. currency continued its losses as increased hopes for massive U.S. stimulus measures under the newly inaugurated Joe Biden administration eroded demand for safe-haven currencies. The U.S. Dollar Index that tracks the greenback against a basket of other currencies edged down 0.19% to 90.300, after closing almost unchanged during the previous session. The USD/JPY pair inched down 0.04% to 103.47. The dollar was mostly flat against its fellow safe-haven currency, after sliding to a two-week low overnight. The Bank of Japan kept the interest rate unchanged at 0.10% when it handed down its policy decision earlier in the day. Data released earlier in the day showed that Australia’s employment change in December was 50,000, in line with the forecast prepared by Investing.com and down from November’s 90,000 figure. Riskier commodity currencies gained after Asian shares followed their U.S. counterparts to new records as Biden, who has laid out plans for a $1.9 trillion COVID-19 relief package, was sworn into on Wednesday. The new 46th U.S. president vowed to end the “uncivil war” in a deeply divided country dealing with the economic impact of COVID-19 and surging case numbers. The greenback slipped 0.1% against the Canadian dollar earlier in the session, declining for the third consecutive day and seeing a three-year low during the previous session. It also slid 0.2% against the Norwegian crown in another third day of declines. The Bank of Canada held its key overnight interest rate at 0.25% on Wednesday, with the arrival of a COVID-19 vaccine and stronger foreign demand brightening the economic outlook in the medium term. Investors had been watching for the prospect of a micro rate cut of less than 25 basis points. The European Central bank is also due to hand down its policy decision later in the day. The euro gained 0.2%, reversing losses seen during the previous session. Europe also continues to deal with a second wave of COVID-19 cases, and fears are mounting that new strains of the virus could lead to stricter lockdowns and more economic damage.