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Rupee opened lower, Dollar higher vs. major currencies

Thursday,   25-Nov-2021   10:40 AM (IST)

The Indian rupee opened the day lower at 74.5450/5550 levels compared to its previous close at 74.3950/4050 levels after Fed minutes strengthen prospects of US central bank winding down bond purchases sooner. India’s federal government bond yields largely unchanged in early trade amid lack of fresh cues. Indian shares were subdued in volatile trading on Thursday, as technology and energy sectors offset losses in banking stocks, while heavyweight Reliance Industries jumped more than 1% after a sharp fall in the previous session. At 10:26 AM, the S&P BSE Sensex was trading at 58,315 down 26 point, while the broader Nifty50 was at 17,399 down 16 point. As per the technical indicators range for the USDINR pair may be 74.25- 74.75 levels. Rupee has an immediate support at 74.60 levels. A breach of the same may see rupee at 74.70 followed by 74.85 levels. On the positive side rupee is likely to face resistance at 74.35 levels and if it is able to break the same then it may gain up to 74.20 levels followed by 74.10 levels.

The U.S. dollar traded at its highest in over a year to the euro and near a five-year high against the yen as a hawkish tilt by Federal Reserve policymakers, buoyed by strong U.S. data, contrasted to more dovish monetary outlooks in Europe and Japan. The dollar index, which measures the greenback against six major peers, eased slightly to 96.759, but still hovered close to Wednesday's high of 96.938, the strongest level since July 2020. Various Fed policymakers said they would be open to speeding up the taper of their bond-buying programme if high inflation held, and move more quickly to raise interest rates, minutes of the central bank's Nov. 2-3 policy meeting showed on Wednesday. San Francisco Federal Reserve Bank President Mary Daly also said in an interview with Yahoo Finance on Wednesday that she could see a case being made to speed up the Fed's tapering of its bond purchases. Meanwhile, readings on the labour market and consumer spending outstripped economists' estimates, while inflation continued to heat up. The dollar was little changed at 115.355 yen , holding close to the overnight high of 115.525, a level not seen since January 2017. The euro edged higher to $1.1210, but still traded within sight of the near 17-month low hit on Wednesday at $1.1186 after German business confidence slumped for a fifth straight month. While the U.S. calendar is mostly empty on Thursday due to the Thanksgiving holiday, minutes from the European Central Bank's Oct. 28 meeting are due for release. In a news conference after the monetary authority left policy unchanged at that meeting, ECB president Christine Lagarde said officials had discussed "inflation, inflation, inflation," but after "a lot of soul-searching" had stuck to the view that inflationary forces will prove transitory. Lagarde gives a speech at an ECB legal conference later on Thursday, at which board members Frank Elderson and Edouard Fernandez-Bollo will also participate. Sterling rose 0.12% to $1.3342 after dipping as low as $1.3317 on Wednesday for the first time in 11 months. Investors remained focused on whether or not the Bank of England will raise interest rates on Dec. 16. The BOE wrong-footed many investors when it did not lift rates from record lows of 0.1% at the start of the month, following comments from its governor Andrew Bailey in October that policymakers "will have to act" to head off inflation. Bailey speaks at Cambridge University later on Thursday. Elsewhere, the risk-sensitive Australian dollar rose 0.17% to $0.7208, lifting off Wednesday's $0.7185, its lowest level since September. The New Zealand dollar gained 0.25% to $0.68895, stabilising after a slide to a three-month low of $0.6856 the previous day, when the country's Reserve Bank raised the key rate by a quarter of a percentage point to 0.75%, disappointing bulls hoping for a half point increase.