Rupee opened weaker, Dollar lower vs. major currencies

Monday,   12-Apr-2021   10:45 AM (IST)

The Indian rupee opened the day weaker at 74.96/97 levels compared to its previous close at 74.7350/7450 levels and extended its fall to touch the low of 75.1375/1475 levels in early deals as domestic shares drop amid rising coronavirus cases. Surge in virus cases prompted analysts to cut India’s growth projections. India's federal government bond yields largely unchanged in early trade ahead of March inflation data today. Indian shares plunged on Monday amid a relentless surge in coronavirus cases and as the hardest-hit state of Maharashtra considers a lockdown, threatening to derail a recovery in Asia’s third-largest economy. At 10:18 AM, the S&P BSE Sensex was trading at 48,259 down 1332 point, while the broader Nifty50 was at 14,433 down 402 point. As per the technical indicators range for the USDINR pair may be 74.65-75.35 levels. Rupee has an immediate support at 75.18 levels. A breach of the same may see rupee at 75.30 followed by 75.42 levels. On the positive side rupee is likely to face resistance at 74.90 levels and if it is able to break the same then it may gain up to 74.64 levels followed by 74.30 levels.

The dollar languished near 2-1/2-week lows against major peers on Monday as a decline in Treasury yields restrained the U.S. currency. Both the greenback and bond yields are taking something of a breather after scaling multi-month peaks at the end of last month, powered by bets that an accelerating U.S. recovery from the pandemic will lift inflation faster than Federal Reserve policymakers anticipate. While the Fed’s repeated insistence that near-term price pressures will prove transitory has somewhat soothed investors, the dollar firmed on Friday following stronger-than-expected producer price data, taking the edge off the currency’s worst week this year. The dollar index, which tracks the greenback against a basket of six rivals, was little changed at 92.193 early in the Asian session, following a 0.9% slump last week. It dipped below 92 on Thursday for the first time since March 23. The benchmark 10-year Treasury yield was at 1.6745% after dropping as low as 1.6170% last week. It had surged to a more than one-year high of 1.7760% on March 30. Data on Friday showed the largest annual gain in 9-1/2 years for U.S. producer prices, backing expectations for higher inflation as the economy reopens amid an improved public health environment and massive government funding. U.S. consumer price data will be released Tuesday. Fed Chair Jerome Powell speaks on Wednesday at the Economic Club of Washington. In an interview on Sunday on CBS’s “60 Minutes,” Powell said the U.S. economy is at an “inflection point” with expectations that growth and hiring will pick up speed in the months ahead, but he also warned of risks stemming from a hasty reopening. Against the euro, the dollar hovered near the lowest since March 23 at $1.1901. In cryptocurrencies, bitcoin traded near $60,000 after rising as high as $61,222.22 over the weekend, closing the gap to the record peak of $61,781.83 set one month ago.