Rupee opened flat, Yen lower vs. Dollar

Monday,   27-Sep-2021   10:51 AM (IST)

The Indian rupee opened the day almost flat at 73.68/69 levels compared to its previous close at 73.6950/7050 levels as a persistent rally in crude oil prices offset the impact of a further decline on the dollar index. India’s federal government bond yields rise in early trade tracking crude oil prices. Focus is on India's October-March borrowing schedule which is expected today. Indian shares opened higher on Monday, hovering near record highs and advancing for the third straight session, helped by gains in auto and bank stocks. At 10:21 AM, the S&P BSE Sensex was trading at 60,092 up 43 point, while the broader Nifty50 was at 17,857 up 4 point. As per the technical indicators range for the USDINR pair may be 73.50-73.90 levels. Rupee has an immediate support at 73.78 levels. A breach of the same may see rupee at 73.87 followed by 73.95 levels. On the positive side rupee is likely to face resistance at 73.60 levels and if it is able to break the same then it may gain up to 73.51 levels followed by 73.42 levels.

The safe-haven yen sank to its lowest in nearly three months on Monday, while the risk-sensitive Australian dollar continued to recover from an almost one-month low, as fears of widespread contagion from China Evergrande Group receded. The yen also fell as higher U.S. yields attracted Japanese investor money, while rising commodity prices helped the Aussie and Norway’s crown. U.S. yields climbed to their highest since the start of July in anticipation of tighter U.S. monetary policy, while the dollar hovered in the middle of its range of the past week versus major peers. The euro traded little changed at $1.1724, largely ignoring developments in German elections on the weekend, with the Social Democrats projected to narrowly defeat the CDU/CSU conservative bloc. The Federal Reserve announced on Wednesday that it will likely begin to trim its monthly bond purchases as soon as November and flagged interest rate increases may follow sooner than expected, with half of Federal Open Market Committee members projecting a hike next year. Concerns that China’s second-largest developer Evergrande could default on its $305 billion of debt has overshadowed trade in recent weeks, but some of those contagion fears are receding. The People’s Bank of China injected a net 100 billion Yuan ($15.47 billion) into the financial system on Monday, adding to the net 320 billion Yuan last week, the most since January. Several local governments in China have set up special custodian accounts for Evergrande property projects to protect funds earmarked for housing projects from being diverted, media outlet Caixin reported on the weekend. The yen weakened as far as 110.81 per dollar, matching a low on July 7, before trading little changed at 110.67. The benchmark 10-year U.S. Treasury yield touched 1.466% for a second day on Monday, the highest since July 2. The Aussie climbed 0.37% to $0.7282, up from $0.72205 a week ago, its lowest since Aug. 24. The Norwegian crown gained about 0.4% and touched 8.5537 per dollar for the first time since July 6.