Rupee opened higher, Dollar lower vs. major currencies

Monday,   20-Mar-2023   09:58 AM (IST)

The Indian rupee opened the day higher at 82.49/50 levels compared to its previous close at 82.5525/5625 levels tracking mixed Asian currencies and lower dollar overseas. Investor sentiment remained fragile despite a more-than-$3 billion deal over the weekend designed to rescue Credit Suisse and protect the global banking sector. Asian shares mostly fell and currencies were mixed as worries about a contagion from the banking turmoil persisted, with the Fed meeting due in this backdrop. Indian government bond yields marginally lower in early session tracking U.S. peers. Domestic markets opened lower amid subdued global cues. At 9:20 AM, the S&P BSE Sensex was trading at 57,502 down 488 point, while the broader Nifty50 was at 16,981 down 119 point. As per the technical indicators range for the USDINR pair may be 82.25-82.65 levels. Rupee has an immediate support at 82.60 levels. A breach of the same may see rupee at 82.72 followed by 82.84 levels. On the positive side rupee is likely to face resistance at 82.37 levels and if it is able to break the same then it may gain up to 82.29 levels followed by 82.15 levels.

Currency markets showed some cautious optimism after global authorities moved to stem contagion from a simmering banking crisis, with the safe haven dollar on the back foot and the yen tumbling amid a rebound in Treasury yields. The risk-sensitive Australian dollar jumped to a two-week high, while the euro edged higher for a third straight day. Over the weekend, the Federal Reserve, European Central Bank, Bank of England, Swiss National Bank, Bank of Canada and Bank of Japan announced joint action to enhance market liquidity. That followed Swiss authorities' negotiation of a buyout of Credit Suisse by UBS, but at a huge discount and with massive debt write-downs. The yen dived 0.6% to 132.59 per dollar as 10-year Treasury yields jumped 12 basis points to 3.52% to start the week, pulling away from the low of 3.369% from Thursday. Japan's currency had gained 2.5% last week. The dollar was overall weaker as well. The euro added 0.17% to $1.06885 and sterling edged 0.1% higher to $1.2190. The Australian dollar climbed 0.3% to $0.6721, and earlier touched $0.6743 for the first time since March 7. Although the banking system is the currency markets' most immediate focus, a Fed rate-setting meeting on Wednesday looms large. Traders are still of the view that a quarter point hike is likely, even though the global banking sector remains susceptible to contagion risks. That said, money markets are now positioned for a peak in rates in May at around 4.79%, and then 72 basis points of declines until the end of the year.