Rupee opened off record lows, Dollar higher vs. major currencies

Wednesday,   06-Jul-2022   09:52 AM (IST)

The Indian rupee opened the day off lows at 79.26/27 levels compared to its previous close at 79.37/38 levels and is steady in opening deals tracking gain in domestic shares. Rupee had plunged to record low of 79.3750/3850 levels yesterday amid strong dollar and risk aversion in the global markets. Additionally, persistent FII outflows and widening of current account deficit are weighing on rupee. Data late on Monday showed India`s June trade deficit widened to a record $25.63 billion, pushed by a rise in crude oil and coal imports, from $9.61 billion a year ago. Indian bond yields softened today. Indian shares edged up on Wednesday, as strong quarterly performance from top non-banking financial company Bajaj finance boosted financial stocks and a drop in crude prices eased inflation worries. At 9.20 AM, the S&P BSE Sensex was trading at 53,420 up 285 point, while the broader Nifty50 was at 15,874 up 63 point. As per the technical indicators range for the USDINR pair may be 79.00-79.50 levels. Rupee has an immediate support at 79.35 levels. A breach of the same may see rupee at 79.50 followed by 79.63 levels. On the positive side rupee is likely to face resistance at 79.13 levels and if it is able to break the same then it may gain up to 79.00 levels followed by 78.88 levels.

The dollar stood tall on Wednesday, holding at a 20-year peak against the euro and multi-month highs against other major peers as higher gas prices and political uncertainty renewed recession fears and sent investors scrambling to the safe-haven currency. The euro was at $1.0262, only a fraction above its overnight low of $1.0236, its weakest since late 2002. Sterling was also trading down slightly at $1.1965 just off its 18-month intraday low hit overnight, and the Aussie dollar was under pressure at $0.6816. Traders told Reuters of a major dollar order in early London trading that sparked a chain reaction and sped the euro’s drop as it broke through its 2017 low. The euro’s tumble, allied with declines in commodity currencies due to lower oil prices, left the dollar index at 106.46, just off its own overnight 20-year peak. The euro’s drop against the pound was much more muted however, slipping just 0.2% on Tuesday, as sterling was hit by fresh political turmoil. Prime Minister Boris Johnson’s premiership tottered on the brink after the resignations of two senior UK cabinet ministers - finance minister Rishi Sunak and health secretary Sajid Javid - over his leadership.In contrast the recently-under-fire Japanese yen gained a little support from some safety bids, with the dollar dropping 0.2% to 135.5 yen. Bitcoin managed to sit out the turmoil, still hovering around the $20,000 level from which it has been unable to break significantly in either direction for the past month.