Rupee opened flat, Dollar lower vs. major currencies

Thursday,   25-Feb-2021   10:40 AM (IST)

The Indian rupee opened the day flat at 72.32/33 levels compared to its previous close at 72.32/33 levels and moved lower to 72.3850/3950 levels in early deals on dollar buying by a large state-run bank, likely for importers. India's government bond yields trading largely unchanged as traders await outcome of central bank’s special open market operation later today. Indian shares advanced on Thursday for a third straight session, joining a global rally after U.S. Federal Reserve Chairman Jerome Powell quashed rate hike fears, with financials and IT stocks accounting for most of the gains. At 10:13 AM, the S&P BSE Sensex was trading at 51,198 up 417 point, while the broader Nifty50 was at 15,118 up 136 point. As per the technical indicators range for the USDINR pair may be 72.25-72.60 levels. Rupee has an immediate support at 72.40 levels. A breach of the same may see rupee at 72.52 followed by 72.65 levels. On the positive side rupee is likely to face resistance at 72.24 levels and if it is able to break the same then it may gain up to 72.17 levels followed by 72.08 levels.

The safe-haven U.S. dollar languished near three-year lows versus riskier currencies on Thursday as continued dovish signals from the Federal Reserve stoked reflation bets. The greenback sank to a fresh low against the Australian dollar, and held near lows set overnight against its British, Canadian and New Zealand peers. Fed Chair Powell reiterated on Wednesday that the central bank wouldn’t adjust policy until the economy is clearly improving, and will look through any near-term spike in inflation. The remarks to the House of Representatives Committee on Financial Services mirrored his testimony before the Senate the day before. Easy financial conditions, the promise of fiscal stimulus and an accelerating COVID-19 vaccine rollout have driven money into what’s come to be known as the reflation trade, referring to bets on an upswing in economic activity and prices. Commodity-linked currencies are placed to benefit from a pick-up in global trade, while investors have also cheered Britain’s progress in recovering from the coronavirus pandemic. Australia’s dollar rose 0.1% to $0.79717 on Thursday in Asia after earlier touching a fresh three-year high of $0.7975. The New Zealand and Canadian dollars traded just off Wednesday’s multi-year highs. Sterling was little changed at $1.4143 after pushing to the cusp of $1.43 overnight for the first time since April 2018. The euro traded near the top of its recent range at $1.2168, near the almost one-month high of $1.2180 touched earlier this week. The dollar strengthened though against other traditional safe haven currencies, rising 0.1% to 105.94 yen for a third day of gains. It held near the three-month high of 90.945 Swiss francs reached overnight.