Rupee opened higher, Dollar lower vs. major currencies

Monday,   05-Dec-2022   09:41 AM (IST)

The Indian rupee opened the day higher at 81.23/24 levels compared to its previous close at 81.3175/3275 levels after the Chinese Yuan climbed above a key level on optimism over the country's reopening. Other Asian currencies followed the Yuan higher. The Korean won and the Malaysian ringgit were both up. Meanwhile, the Reserve Bank of India begins its three-day policy meeting, with the decision due on Wednesday. Indian government bond yields little changed today as traders await RBI's monetary policy decision. Domestic equities opened with losses today, underperforming their Asian peers that gained on hopes of ease in China's Covid-19 restrictions. At 9:19 AM, the S&P BSE Sensex was trading at 62,733 down 136 point, while the broader Nifty50 was at 18,672 down 24 point. As per the technical indicators range for the USDINR pair may be 81.00-81.50 levels. Rupee has an immediate support at 81.39 levels. A breach of the same may see rupee at 81.48 followed by 81.63 levels. On the positive side rupee is likely to face resistance at 81.15 levels and if it is able to break the same then it may gain up to 81.00 levels followed by 80.91 levels.

The dollar struggled to gain a foothold on Monday and was languishing at five-month lows as traders looked past stronger than anticipated U.S. jobs data, while growing hopes of China reopening boosted risk sentiment. The dollar index, which measures the currency against six major peers including the yen and euro, was down 0.18% at 104.28, its lowest since June 28. The index fell 1.4% last week. The dollar initially jumped on Friday after U.S. data showed that employers added 263,000 jobs in November, well above estimates of 200,000, but gave up the gains as traders booked profits, with some of the Fed speakers allaying market concerns. Investor focus will firmly be on the U.S. consumer price inflation data due on Dec. 13, one day before the Fed concludes its two-day meeting. The U.S. central bank is expected to increase rates by an additional 50 basis points at the meeting. Fed funds futures traders are now pricing for the Fed’s benchmark rate to peak at 4.92% in May. Also, weighing on the dollar was growing hopes of China slowly reopening, with more Chinese cities announcing an easing of coronavirus curbs on Sunday.