Rupee opened lower, Dollar higher vs. major currencies
Thursday,
18-Aug-2022
09:47 AM (IST)
The Indian rupee opened the day lower at 79.60/61 levels compared to its previous close at 79.4450/4550 levels tracking a decline in most Asian currencies as investors reviewed the minutes of July Federal Reserve meeting. Policymakers in Fed July meeting minutes comment that the U.S. central bank will want to rein in the pace of rate hikes in upcoming meetings, but rates likely to remain uncomfortably high to bring inflation to 2% target. Importer dollar demand is likely to fuel more losses for rupee later in the session. Regional shares slip following overnight pullback on Wall Street. Indian government bond yields were higher in early trades on Thursday, as some traders booked profits after a sharp rally in prices, while they await auction of a new 10-year bond. Equity markets opened lower amid weak global cues. At 9.31 AM, the S&P BSE Sensex was trading at 60,004 down 256 point, while the broader Nifty50 was at 17,871 down 73 point. As per the technical indicators range for the USDINR pair may be 79.50-79.90 levels. Rupee has an immediate support at 79.72 levels. A breach of the same may see rupee at 79.81 followed by 80.02 levels. On the positive side rupee is likely to face resistance at 79.58 levels and if it is able to break the same then it may gain up to 79.44 levels followed by 79.30 levels.
The dollar was on the front foot on Thursday after minutes from the Federal Reserve's July meeting pointed to U.S. interest rates staying higher for longer to bring down inflation. The greenback gained most against the Antipodeans, especially the Aussie, which was dragged down as weaker-than-expected wage growth weighed on Australia's interest rate outlook. The Australian dollar fell 1.2% overnight and on Thursday hovered at $0.6930, just above Wednesday's one-week low of $0.6912. The New Zealand dollar also fell, losing nearly 1% to unwind an initial jump after the central bank hiked interest rates and steepened its projected rate-hike track. The greenback rose against the yen and sterling and was steady on the euro. The U.S. dollar index was steady at 106.73. Federal Reserve officials saw "little evidence" late last month that U.S. inflation pressures were easing, the minutes showed. The minutes flagged an eventual slowdown in the pace of hikes, but not a switch to cuts in 2023 that traders until recently had priced in to interest-rate futures. Traders see about a 36% chance of a third consecutive 75 basis point Federal Reserve rate hike in September, and expect rates to hit a peak around 3.7% by March, and to hover around there until later in 2023. Sterling also slid overnight after double-digit inflation focused investors' concerns on recession risk. Britain's consumer price inflation rose to 10.1% in July, its highest since February 1982, official figures showed and after a brief blip higher sterling fell to $1.2031.
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