Rupee opened higher, Dollar under pressure vs. major currencies

Thursday,   23-Jun-2022   10:05 AM (IST)

The Indian rupee opened the day higher at 78.26/27 levels compared to its previous close at 78.3850/3950 levels as oil prices extend losses amid US recession risk. India's sovereign bond yields fall with the benchmark bond yield nearing 7.35%, tracking decline in U.S. Treasury yields as well as oil prices, while minutes of the latest monetary policy meeting did not provide any new surprise. India’s current account deficit narrowed in January-March from the previous quarter, due to a moderation in trade gap and lower net outgo of primary income. The current account deficit was at $13.4 billion, or 1.5% of gross domestic product, in the fourth quarter of the last fiscal year that ended Mar. 31, as against deficit of $22.2 billion, or 2.6% of GDP in October-December, data from the Reserve Bank of India showed yesterday. The Equity markets opened higher on Thursday tracking mixed global cues. At 9.39 AM, the S&P BSE Sensex was trading at 52,214 up 391 point, while the broader Nifty50 was at 15,535 up 122 point. As per the technical indicators range for the USDINR pair may be 78.00-78.50 levels. Rupee has an immediate support at 78.35 levels. A breach of the same may see rupee at 78.45 followed by 78.58 levels. On the positive side rupee is likely to face resistance at 78.19 levels and if it is able to break the same then it may gain up to 78.03 levels followed by 77.93 levels.

The U.S. dollar remained under pressure on Thursday as it looked set to extend declines against major peers to a fourth day, hurt by Treasury yields wallowing near two-week lows amid rising concerns of a recession. The dollar index, which measures the currency against six key rivals, slipped 0.1% to 104.12, bringing its decline since Friday to 0.46%. It has fallen 1.56% from the two-decade peak of 105.79 reached on June 15, when the Federal Reserve raised rates by 75 basis points - the biggest hike since 1994. Markets have become increasingly concerned that the Fed’s commitment to quelling red-hot inflation will spur a recession. Those worries sent the 10-year Treasury yields sliding to an almost two-week low. Overnight, Fed Chair Jerome Powell said in testimony to Congress that the central bank is fully committed to bringing prices under control even if doing so risks an economic downturn. He said a recession was “certainly a possibility,” reflecting fears in financial markets that the Fed’s tightening pace will throttle growth. The dollar slid  to 135.43 yen, retreating from a 24-year high of 136.71 reached on Wednesday. However the U.S. currency gained against the South Korean won, scaling 1,302.77 for the first time in 13 years and last trading 0.19% higher at 1,300 won. The euro was little changed at $1,0572.