Rupee opened lower, Dollar higher vs. major currencies

Friday,   19-Aug-2022   09:46 AM (IST)

The Indian rupee opened the day lower at 79.7575/7675 levels compared to its previous close at 79.6725/6825 levels as Asian currencies fell on concerns that the Federal Reserve could continue to hike rates aggressively. Offshore Chinese Yuan falls to lowest in three months against dollar. Unexpected dip in U.S. initial jobless claims signal healthy labour market, providing Fed room to maintain aggressive pace of rate hikes. Indian government bond yields inched higher on Friday, a day after the Reserve Bank of India highlighted inflation concerns, while traders remained focused on upcoming debt supply, including a new 10-year note. Equity markets opened in green zone amid weak global cues. At 9.18 AM, the S&P BSE Sensex was trading at 60,303 up 5 point, while the broader Nifty50 was at 17,973 up 17 point. As per the technical indicators range for the USDINR pair may be 79.60-79.95 levels. Rupee has an immediate support at 79.80 levels. A breach of the same may see rupee at 79.87 followed by 80.02 levels. On the positive side rupee is likely to face resistance at 79.67 levels and if it is able to break the same then it may gain up to 79.58 levels followed by 79.45 levels.

The Dollar surged against its peers as U.S. Federal Reserve policymakers continued to talk up the need for further interest rate hikes ahead of their key Jackson Hole symposium next week and investors reevaluated minutes from the U.S. central bank's July meeting as being more hawkish than originally thought. St. Louis Fed President James Bullard said he is leaning toward supporting a third straight 75-basis-point interest rate hike in September, while San Francisco Fed colleague Mary Daly said hiking rates by 50 or 75 basis points next month would be "reasonable." Kansas City Fed President Esther George said she and her colleagues will not stop tightening policy until they are "completely convinced" that overheated inflation is coming down. U.S. Fed Chair Jerome Powell will have a chance to update the market on his views at the annual Jackson Hole symposium on August 25-27. Elsewhere, European Central Bank board member Isabel Schnabel fueled inflation worries overnight by saying consumer prices could still accelerate in the short term. Euro zone inflation reached a new record high of 8.9% year-on-year in July. Consumer prices in the 19 countries using the euro rose 0.1% month-on-month in July for a 8.9% year-on-year increase, the highest since the euro was created in 1999.