Rupee opened lower, Dollar lower vs. major currencies

Friday,   24-Sep-2021   10:38 AM (IST)

The Indian rupee opened the day lower at 73.77/78 levels compared to its previous close at 73.6425/6525 levels as prospects of policy normalization lifts US Treasury yields to its highest in almost three months. India’s federal government bond yields rise in early session tracking spike in U.S. Treasury yields as well as crude oil prices, while traders await fresh supply of debt. Indian shares scaled record highs on Friday, with the benchmark S&P BSE Sensex topping the 60,000 level for the first time on the back of gains in tech and property stocks. At 10:19 AM, the S&P BSE Sensex was trading at 60,172 up 286 point, while the broader Nifty50 was at 17,885 up 62 point. As per the technical indicators range for the USDINR pair may be 73.50-74.00 levels. Rupee has an immediate support at 73.82 levels. A breach of the same may see rupee at 73.94 followed by 74.10 levels. On the positive side rupee is likely to face resistance at 73.59 levels and if it is able to break the same then it may gain up to 73.48 levels followed by 73.36 levels.

The dollar wallowed near its lowest level in a week versus major peers on Friday, as improved risk sentiment wiped out recent gains amid easing concerns about contagion from a potential China Evergrande Group default. Risk appetite returned, lifting oil and global equities, even as hawkish comments from the Bank of England pushed up yields globally, with those on 10-year U.S. Treasury notes hitting the highest since July overnight at 1.437%. That failed to help the greenback though, with the U.S. Dollar Index, which measures the currency against a basket of six rivals, easing slightly to 93.068 from Thursday, when it slid 0.36% and touched the lowest since Sept. 17 at 92.977. That erased gains for the week, and set the index up for a 0.16% decline. Beijing injected fresh cash into its financial system on Thursday, as embattled property giant Evergrande announced it would make interest payments on an onshore bond. There has been no word yet, however, on whether it also made coupon payments on dollar bonds due that day, with more due next week. Even so, the mood improved, weighing on other safe havens like the yen and lifting commodity-linked currencies like the Australian dollar. The yen eased 0.05% to 110.385 per dollar after earlier hitting 110.435, its weakest level since Sept. 8. The euro added 0.05% to $1.1743, continuing to rebound from a more than one-month low of $1.16835 reached Thursday. The Aussie rose 0.21% to $0.73105, and earlier touched a one-week high of $0.73165. Meanwhile, sterling was 0.07% higher at $1.3734, approaching the previous session’s high of $1.3750, a first since Sept. 20. The BOE said two of its policymakers had voted for an early end to pandemic-era government bond buying and markets brought forward their expectations for an interest rate rise to March. Norway’s crown was little changed at 8.5754 per dollar after jumping to a 1-1/2 month high of 8.5552 on Thursday, after the country’s central bank raised its benchmark interest rate and said more hikes will follow in the coming months. A day earlier, the Federal Reserve said it could begin reducing its monthly bond purchases by as soon as November, and that interest rates could rise quicker than expected by next year. Several Fed officials are due to speak on Friday, including Chair Jerome Powell, who gives opening remarks at a Fed Listens event.