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Rupee opened higher, Dollar lower vs. major currencies

Friday,   05-Aug-2022   09:50 AM (IST)

The Indian rupee opened the day higher at 79.16/17 levels compared to its previous close at 79.4650/4750 levels ahead of a central bank monetary policy decision today, supported by overnight weakness in oil prices and the dollar. Markets are keenly awaiting the Reserve Bank of India's policy decision at the end of a three-day meeting, where it's widely expected to increase its key interest rate from anywhere between 25 basis points and 50 basis points. Indian government bond yields dropped today with the 10-year yield trading at a three-month low, after global oil prices fell overnight. Domestic equity markets opened on a positive ground. At 9.21 AM, the S&P BSE Sensex was trading at 58,424 up 125 point, while the broader Nifty50 was at 17,396 up 14 point. As per the technical indicators range for the USDINR pair may be 78.70-79.50 levels. Rupee has an immediate support at 79.37 levels. A breach of the same may see rupee at 79.64 followed by 79.85 levels. On the positive side rupee is likely to face resistance at 78.90 levels and if it is able to break the same then it may gain up to 78.75 levels followed by 78.45 levels.

The dollar struggled to gain a footing on Friday after falling by its sharpest pace in two weeks, as investors remained on tenterhooks ahead of the widely anticipated U.S. jobs data and amid growing worries about a recession. The U.S. dollar index, which measures the greenback against a basket of currencies, fell 0.68% overnight, the largest fall since July 19, and last traded 105.79. Investors await the key U.S. nonfarm payrolls report due at 1230 GMT, which will provide hints of how the U.S. economy is faring. Economists expect an increase of 250,000 jobs for the month of July, after 372,000 were added in June. However, signs of softening in the labour market could already be underway, as overnight data showed that the number of Americans filing new claims for unemployment benefits increased last week. Against the weaker greenback, the euro surged 0.8% overnight and last traded $1.0238, though reprieve is likely short-lived as concerns about an energy crisis remain. A stand-off over the return of a turbine that Russia says is holding back gas supplies to Europe showed no sign of being resolved on Thursday, as Moscow said it needed documentation to confirm the equipment was not subject to sanctions. Meanwhile, sterling held steady at around $1.2157 in the early Asia trade on Friday, recouping most of its losses following a grim signal from the Bank of England. The pound is down about 0.3% for the week, reversing gains made the previous two weeks. On Thursday, the BoE raised its benchmark rate by half a percentage-point to 1.75%, the highest since late 2008, but warned about a long recession ahead in Britain. Elsewhere, the dollar tumbled 0.69% against the yen overnight and is on track for a third straight weekly loss. It last traded 132.9 yen per dollar. Similarly, the risk-sensitive Aussie and kiwi stood at $0.6956 and $0.6290, respectively, after rising about 0.2% and 0.3% overnight.