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Rupee opened higher, Dollar weaker vs. major currencies

Thursday,   24-Nov-2022   09:46 AM (IST)

The Indian rupee opened the day higher at 81.72/73 levels compared to its previous close at 81.8450/8550 levels after the dollar index plunged following disappointing U.S. data and a less hawkish outlook on interest rates from U.S. Federal Reserve policymakers. Fall in oil prices also aided rupee. Asian currencies and equities are higher. Indian government bond yields lower in early trade as U.S. Federal Reserve's Nov meeting minutes showed a less hawkish interest rate outlook. Domestic markets inched higher after dovish US FOMC minutes cheered global stocks. At 9:18 AM, the S&P BSE Sensex was trading at 61,630 up 119 point, while the broader Nifty50 was at 18,301 up 34 point. As per the technical indicators range for the USDINR pair may be 81.40-81.85 levels. Rupee has an immediate support at 81.85 levels. A breach of the same may see rupee at 81.92 followed by 81.99 levels. On the positive side rupee is likely to face resistance at 81.65 levels and if it is able to break the same then it may gain up to 81.51 levels followed by 81.35 levels.

The U.S. dollar was broadly weaker on Thursday as investors, encouraged the prospect of a slower pace of interest rate hikes from the Federal Reserve, placed bets on riskier assets. The eagerly awaited readout of the Nov. 1-2 Fed meeting showed officials were largely satisfied they could now move in smaller steps. The dollar index, which measures the greenback against six major peers, was down 0.066% at 105.830, after sliding 1% overnight. This month, the Fed raised its key rate by three-quarters of a percentage point for the fourth straight time in an effort to tame stiflingly high inflation. But slightly cooler-than-expected U.S. consumer price data has stoked hopes of a more moderate pace of hikes. Those hopes have seen the dollar index slide 5.1% in November, putting it on track for its worst monthly performance in 12 years. Citi strategists said there is still substantial uncertainty around how high rates might climb, despite the consensus that rates will rise more slowly. The minutes also showed an emerging debate within the Fed over the risks that rapid policy tightening could pose to economic growth and financial stability. At the same time, policymakers acknowledged there had been little demonstrable progress on inflation and that rates still needed to rise. Data on Wednesday showed U.S. business activity contracted for a fifth straight month in November, with a measure of new orders dropping to its lowest level in 2-1/2 years as higher interest rates slowed demand. Rising coronavirus cases have led Chinese cities to impose more curbs, increasing investor worries about the economy and putting a lid on risk appetite. The Australian dollar rose 0.25% versus the greenback at $0.675, while the kiwi was 0.26% higher at $0.625. The euro was up 0.23% at $1.0419, while sterling was last trading at $1.2083, up 0.26% on the day. The pound rose 1.4% overnight after preliminary British economic activity data beat expectations, though it still showed that a contraction was underway. The Japanese yen strengthened 0.54% versus the greenback to 138.84 per dollar. U.S. markets will be closed on Thursday for Thanksgiving and liquidity will likely be thinner than usual.