Rupee opened higher, Dollar higher vs. major currencies

Tuesday,   15-Jun-2021   10:41 AM (IST)

The Indian rupee opened the day higher at 73.20/21 levels compared to its previous close at 73.27/28 levels amid expectations that rise in outright rates to prompt exporter dollar sales. India’s 10-year benchmark bond yield rises to over six-week high as inflation spikes above central bank’s comfort zone. Indian shares rose to all-time highs on Tuesday as gains in broader markets helped investors look past data that showed retail inflation hit a six-month high, with the focus shifting to the outcome of the U.S. Federal Reserve’s policy meeting later this week. At 10:14 AM, the S&P BSE Sensex was trading at 52,808 up 257 point, while the broader Nifty50 was at 15,885 up 73 point. As per the technical indicators range for the USDINR pair may be 73.00-73.40 levels. Rupee has an immediate support at 73.33 levels. A breach of the same may see rupee at 73.40 followed by 73.52 levels. On the positive side rupee is likely to face resistance at 73.11 levels and if it is able to break the same then it may gain up to 73.02 levels followed by 72.90 levels.

The dollar hovered below a one-month high compared with major peers on Tuesday ahead of a much-anticipated Federal Reserve meeting that could signal a change in the outlook for U.S. monetary policy. The U.S. currency has been buoyed as traders closed short positions before the Fed’s two-day policy-setting confab, which kicks off on Tuesday. The dollar index, which measures the greenback against a basket of six currencies, was flat early in Asia at 90.517. It has pushed briefly above 90.60 in each of the last two sessions, and 90.63 would be the strongest level since May 14. Traders will be watching carefully for clues on when policymakers will start tapering dollar-depreciating stimulus. So far Fed officials, led by Chair Jerome Powell, have stressed that rising inflationary pressures are transitory and ultra-easy monetary settings will stay in place for some time to come, although recent economic data has raised concerns that price pressure after the post-COVID-19 economic reopening could force an earlier stimulus withdrawal. Nearly 60% of economists in a Reuters poll expect a tapering announcement in the next quarter, despite a patchy recovery in the job market. Currency markets settled in tight ranges with implied volatility plumbing multi-month lows after last week’s strong inflation readings and a dovish European Central Bank meeting failed to dislodge currencies from recent trading levels. The Deutsche Bank FX Volatility Index plunged to 5.6 on Friday, its lowest in nearly 16 months, and remained just above that level this week. The euro was little changed at $1.21185 on Tuesday, near an almost one-month low at $1.20930 reached on Friday. The yen was at 110.075 per dollar, almost flat from Monday, after a more than 0.3% slide in each of the past two sessions. In cryptocurrencies, bitcoin traded above $41,000 for the first time in more than two weeks on Monday, and was last around $40,495 after rallying from below $35,000 on Sunday after Tesla Inc boss Elon Musk tweeted that the electric carmarker would resume allowing bitcoin transactions when miners who verify transactions use more renewable energy. Ether also got a small lift in sympathy with its bigger rival, but remained well within recent ranges at $2,605.54 on Tuesday.