Rupee opened lower, Dollar higher vs. major currencies

Friday,   18-Jun-2021   10:44 AM (IST)

The Indian rupee opened the day lower at 74.0975/1075 levels compared to its previous close at 74.0775/0875 levels on expectations that hawkish Fed to weigh on carry and portfolio inflows. Indian federal government bond yields marginally lower in early trade after central bank’s heavy debt purchase yesterday. Fall in U.S. Treasury yields also aid. Indian shares recovered from previous session's losses to trade higher on Friday, fuelled by gains in information technology stocks and strength in broader Asian markets. At 10:33 AM, the S&P BSE Sensex was trading at 51,966 down 357 point, while the broader Nifty50 was at 15,572 down 120 point. As per the technical indicators range for the USDINR pair may be 73.80-74.50 levels. Rupee has an immediate support at 74.25 levels. A breach of the same may see rupee at 74.38 followed by 74.70 levels. On the positive side rupee is likely to face resistance at 73.83 levels and if it is able to break the same then it may gain up to 73.65 levels followed by 73.43 levels.

The dollar was headed for its best week in nearly nine months on Friday as investors have scrambled to price in a sooner-than-expected ending to extraordinary U.S. monetary stimulus in the days after a surprise shift in tone from the Federal Reserve. In the two sessions since Fed officials projected possible rate hikes in 2023, the greenback has busted from recent ranges and surged about 1.8% against the euro, even further against the Aussie and more than 1% against sterling and the kiwi. The dollar index has zoomed above its 200-day moving average to hit a more than two-month high of 92.010 and is on track for a 1.5% weekly gain, its largest since last September. Majors stabilised early in the Asia session and did not show much enthusiasm for bouncing back, with moves only slight. The euro sat just above a two-month low at $1.1904. The Australian dollar parked at $0.7555, also near the two-month trough of $0.7540 that it hit overnight. The kiwi likewise perched at a two-month low, and dropped through its 200-day moving average, despite far better-than-expected New Zealand growth numbers on Thursday. Sterling sat near a six-week low at $1.3936. The dollar is also on track for a 0.5% rise against the yen, which traded at 110.25 per dollar after hitting an 11-week peak of 110.82 on Thursday.