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Rupee opened flat, Dollar retreated vs. major currencies

Wednesday,   31-May-2023   09:51 AM (IST)

The Indian rupee opened the day flat at 82.7125/7225 levels compared to its previous close at 82.71/72 levels. The Chinese Yuan dropped to a fresh six-month low to the U.S. dollar on concerns over the growth outlook. Asian shares and U.S. equity futures lower. Indian government bond yields inch down tracking easing U.S. yields. Indian shares opened lower after hitting five-month highs in three sessions in a row, as caution set in ahead of the U.S. Congress' approval of the debt deal, while fresh concerns about China's stuttering economic recovery weighed on the sentiment. At 9:22 AM, the S&P BSE Sensex was trading at 62,717 down 252 point, while the broader Nifty50 was at 18,562 down 72 point. As per the technical indicators range for the USDINR pair may be 82.50-82.90 levels. Rupee has an immediate support at 82.78 levels. A breach of the same may see rupee at 82.85 followed by 82.98 levels. On the positive side rupee is likely to face resistance at 82.64 levels and if it is able to break the same then it may gain up to 82.53 levels followed by 82.43 levels.

Dollar retreated after hitting a 10-week high against its peers and Japanese Yen strengthened after Japanese officials gave their currency a nudge. Currency markets have been choppy after U.S. President Joe Biden and Republican House Speaker Kevin McCarthy on Sunday signed off on an agreement to temporarily suspend the U.S. debt ceiling and cap some federal spending in order to prevent a debt default. Meanwhile, the legislation brokered to lift the U.S. debt ceiling passed an important hurdle late on Tuesday, advancing to the full House of Representatives for debate and an expected vote on passage on Wednesday. The Australian dollar rode a rollercoaster after it jumped on heated local inflation data only to be dragged lower moments later by more signs of a slowdown in China, a major trading partner. The Chinese Yuan slumped to a six-month low in offshore trading. Against the Chinese Yuan, the U.S. dollar climbed as much as 0.38% to 7.1171 for the first time since Nov. 30. Meanwhile, the greenback was little changed at 139.82 yen following a 0.46% slide on Tuesday, when Japan's top currency diplomat said following a meeting of the country's finance ministry, central bank and financial watchdog that officials "will closely watch currency market moves and respond appropriately as needed." Elsewhere, Japan will closely watch currency market moves and respond "appropriately" as needed, the country's top currency diplomat said on Tuesday after financial authorities met in response to a weakening in the Yen to its softest in six months versus the dollar. The Yen strengthened on news of the unscheduled meeting and held onto those gains.