Rupee opened higher, Dollar lower vs. major currencies

Friday,   20-May-2022   09:52 AM (IST)

The Indian rupee opened the day higher at 77.51/52 levels compared to its previous close at 77.7250/7350 levels as dollar index slips and China rate cut boosts Asian currencies and shares. China lowers five-year loan prime rate by 15 basis points to 4.45%, biggest reduction since China revamped mechanism in 2019. India's sovereign bond yields trading marginally higher in early session, as traders await fresh supply of debt through weekly auction. The benchmark BSE Sensex and the broader NSE index jumped after yesterday’s decline and are trading higher tracking similar move in Asian peers. At 9:22 AM, the S&P BSE Sensex was trading at 53,698 up 905 point, while the broader Nifty50 was at 16,102 up 293 point. As per the technical indicators range for the USDINR pair may be 77.25-77.75 levels. Rupee has an immediate support at 77.65 levels. A breach of the same may see rupee at 77.74 followed by 77.86 levels. On the positive side rupee is likely to face resistance at 77.45 levels and if it is able to break the same then it may gain up to 77.27 levels followed by 77.18 levels.

The Dollar slipped across the board, falling to a 2-week low, extending its pullback from a two-decade high, amid disappointing data from U.S. and as most major currencies battered by the dollar's advance this year drew interest from buyers. Euro rose to a more than 1-week high against the dollar, as investors priced in the chance of an aggressive near-term tightening path by the European Central Bank. The U.S. dollar headed for its worst week since early February against major peers on Friday, weighed down by a retreat in Treasury yields and fatigue after the currency’s breathless 10%, 14-week surge. The dollar index, which measures it against six major rivals, was down 1.5% for the week to 102.96, on track to snap a six-week winning run. A week earlier it had soared to the highest since January 2003 at 105.01. Even with global stocks continuing to slide amid risks to growth from aggressive monetary tightening, led by the Federal Reserve, and China’s strict lockdowns to quash a COVID-19 outbreak, the dollar’s appeal as a haven was eclipsed by a decline in U.S. yields as investors rushed for the safety of Treasury bonds. The benchmark 10-year Treasury yield sank overnight to a more than three-week low of 2.772%, from a 3 1/2-year high of over 3.2% earlier this month. Other safe haven currencies continued to rally overnight, as a key index of global equities headed for a seventh weekly decline, its longest ever. The yen headed for a second-straight weekly advance, with the dollar dropping 1.16% to 127.785 yen since last Friday.