Rupee opened higher, Dollar in range vs. major currencies

Tuesday,   21-Mar-2023   10:01 AM (IST)

The Indian rupee opened the day higher at 82.54/55 levels compared to its previous close at 82.6350/6450 levels tracking flat movement in dollar and as Asian markets attempt to shake off jitters from a banking crisis in the United States and Europe. Asian equities and Australian shares were up tracking a rally in U.S. shares overnight and as European banking stocks recovered earlier losses. Indian government bond yields are marginally higher in early session ahead of state debt sale. The key benchmark indices started today's session on firm ground tracking positive global cues as fears related to the banking crisis in the West seemed to subside. At 9:21 AM, the S&P BSE Sensex was trading at 57,810 up 181 point, while the broader Nifty50 was at 17,053 up 65 point. As per the technical indicators range for the USDINR pair may be 82.40-82.90 levels. Rupee has an immediate support at 82.72 levels. A breach of the same may see rupee at 82.84 followed by 82.97 levels. On the positive side rupee is likely to face resistance at 82.46 levels and if it is able to break the same then it may gain up to 82.32 levels followed by 82.20 levels.

The dollar regained some ground on Tuesday but was pinned near a five-week low as traders tiptoed back into riskier assets after UBS' state-backed takeover of Credit Suisse allayed some fears of a widespread, systemic banking crisis. Market sentiment remained fragile, however, as investors struggled to determine the scale of the ramifications from a sector hit that began with Silicon Valley Bank's collapse, putting a cap on risk appetite and giving some support to the safe haven dollar. News of UBS' planned takeover of rival Credit Suisse on Sunday - a shotgun merger engineered by Swiss authorities - gave way to a small risk-on rally on Monday, as worries over market-shaking turmoil across global banks waned. In another show of authorities' determination to stem widespread contagion and to ease market concerns, the Federal Reserve, in coordination with central banks elsewhere, announced on Sunday that it would offer daily currency swaps to ensure banks in Canada, Britain, Japan, Switzerland and the euro zone would have the dollars needed to operate. The dollar slipped 0.12% to 131.15 against the Japanese yen, while the U.S. dollar index, which measures the greenback against a basket of currencies, fell 0.04% to 103.30. Lower U.S. rate expectations also added to downward pressure on the dollar ahead of the Fed's two-day policy meeting commencing later on Tuesday. According to the CME FedWatch tool, markets are pricing in a 26.2% chance that the Fed will stand pat when it announces its monetary policy decision on Wednesday, with a 73.8% chance of a 25 basis point rate hike. Elsewhere, the kiwi slid 0.16% to $0.6237. The Reserve Bank of New Zealand said on Tuesday it saw no immediate need to request the reinstatement of a U.S. dollar swap line that expired in 2021.