Rupee opened higher, Pound up vs. Dollar

Wednesday,   18-May-2022   10:00 AM (IST)

The Indian rupee opened the day slightly higher at 77.55/56 levels compared to its previous close at 77.5650/5750 levels as upbeat US retail sales data alleviates growth concerns, boosting risk assets. India's sovereign bond yields trading largely unchanged in early session, as market awaits minutes of the Monetary Policy Committee’s unscheduled meeting that was held earlier this month. Indian shares rose for a third straight session on Wednesday, helped by gains in some financial and IT stocks, even as investors fretted about the impact of interest rate hikes on global economic growth. At 9:18 AM, the S&P BSE Sensex was trading at 54,601 up 282 point, while the broader Nifty50 was at 16,346 up 87 point. As per the technical indicators range for the USDINR pair may be 77.20-77.70 levels. Rupee has an immediate support at 77.58 levels. A breach of the same may see rupee at 77.69 followed by 77.88 levels. On the positive side rupee is likely to face resistance at 77.42 levels and if it is able to break the same then it may gain up to 77.28 levels followed by 77.16 levels.

Dollar declined pulling back from a two-decade high against a basket of major peers, as an uptick in investors' appetite for riskier bets diminished the Dollar's appeal. U.S. retail sales increased solidly in April, showing no signs of demand letting up despite high inflation. Retail sales rose 0.9% last month. Data for March was revised higher to show sales advancing 1.4% instead of 0.7% as previously reported. The strong consumer spending numbers come amid increasing worries over how economic growth will hold up next year as the U.S. Federal Reserve and other central banks tighten monetary policy to rein in sustained prices pressures. U.S. Federal Reserve chair Jerome Powell said at a Wall Street Journal event on Tuesday, the Fed will "keep pushing" to tighten U.S. monetary policy until it is clear inflation is declining. While the dollar briefly pared its loses after Powell's remarks, it then resumed its decline. Overnight surges left the euro and pound sitting pretty in early Asia helped by good U.K. jobs data and a general improvement in investor sentiment on solid U.S. retail sales and hopes of easing lockdowns in China. The European common currency touched $1.0563 in early Asia trade, after rising 1.1% overnight, its largest day of percentage gains since March. Sterling touched $1.2501 after a 1.4% overnight rally, its best day since late 2020, also helped by data that showed Britain’s jobless rate hit a 48-year low. These gains pushed the dollar index, which measures the greenback against six peers, as low as 103.18 in early Asia, its lowest in nearly two weeks. Shanghai on Tuesday achieved its long-awaited milestone of three consecutive days with no new COVID-19 cases outside quarantine zones having set out its clearest timetable yet for exiting a lockdown the day before.