Rupee opened higher, Dollar steady v. major currencies

Wednesday,   17-Aug-2022   09:42 AM (IST)

The Indian rupee opened the day higher at 79.27/28 levels compared to its previous close at 79.6550/6650 levels as concerns over global growth outlook dented oil prices, while the U.S. dollar remained subdued ahead of the release of minutes from the Federal Reserve's previous policy meeting. Indian government bond yields fell in early deals as trading resumed after a four-day holiday weekend, with a drop in overnight oil prices and easing domestic inflation aiding sentiment. Equity markets opened on a positive note amid mixed global cues. At 9.18 AM, the S&P BSE Sensex was trading at 59,928 up 85 point, while the broader Nifty50 was at 17,855 up 30 point. As per the technical indicators range for the USDINR pair may be 79.00-79.60 levels. Rupee has an immediate support at 79.38 levels. A breach of the same may see rupee at 79.50 followed by 79.68 levels. On the positive side rupee is likely to face resistance at 79.23 levels and if it is able to break the same then it may gain up to 79.02 levels followed by 78.84 levels.

Dollar is steady against a basket of currencies as investors await U.S. retail sales and minutes from the Federal Reserve's July meeting. Dollar had bounced from a six-week low last week as investors ramp up bets that the U.S. central bank will continue to hike rates aggressively as inflation remains persistently high. Fed funds futures are currently pricing in a 60% chance of a 50 basis points increase and a 40% probability of a 75 basis points hike in September meeting. The New Zealand dollar rallied on Wednesday after the central bank reinforced its hawkish policy stance alongside its seventh straight rate hike, while the Australian dollar tumbled after wage growth data missed forecasts. The news from the antipodes helped provide direction to markets that had been drifting ahead of the release of minutes of the U.S. Federal Reserve's latest meeting. The kiwi gained 0.58% to $0.6377 after the Reserve Bank of New Zealand hiked rates by an expected 50 basis points, and pointed to the need to bring forward the timing of future rate increases. Across the Tasman Sea, the Australian dollar fell as much as 0.5% after data showed Australian wage increases missed forecasts and lagged badly behind inflation. It has since pared those losses to trade down 0.2%, holding back just above the symbolic $0.7 level.