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Rupee opened slightly higher, Dollar higher vs. major currencies

Tuesday,   11-Jun-2024   09:55 AM (IST)

The Indian rupee opened the day slightly higher at 83.4825/4925 levels compared to its previous close at 83.5050/5150 levels and is trading rangebound in early deals amidst weakness in Asian peers on one hand and expectation of RBI intervention that does not want rupee to fall to an all-time low on the other. Asian currencies were down 0.1% to 0.3%. Indian government bond yields trading flattish as traders await key inflation prints and U.S. central bank's monetary policy decision for cues. Indian shares were subdued as lacklustre performances in heavyweight financials partially offset gains in energy stocks, while investors await key U.S. inflation reading and the Federal Reserve's policy decision. At 9:18 AM, the S&P BSE Sensex was trading at 76,400 down 90 points, while the broader Nifty50 was at 23,246 down 14 points. As per the technical indicators range for the USDINR pair may be 83.35-83.55 levels. Rupee has an immediate support at 83.55 levels. A breach of the same may see rupee at 83.62 followed by 83.68 levels. On the positive side rupee is likely to face resistance at 83.43 levels and if it is able to break the same then it may gain up to 83.35 levels followed by 83.28 levels.

The dollar hovered near a one-month peak against the euro and pushed to a one-week high versus the yen on Tuesday as traders braced for crucial U.S. inflation data and fresh Federal Reserve interest rate forecasts the following day. The U.S. currency was supported by higher Treasury yields in the aftermath of surprisingly robust domestic jobs data at the end of last week, which sparked a dramatic paring of bets for Fed rate cuts this year. The Bank of Japan sets policy on Friday, and while investors expect a reduction in the central bank's monthly government bond purchases as early as this meeting, gaping yield differentials with the U.S. have kept the yen on the defensive. The dollar added 0.13% to stand at 157.25 yen early in the Asian day, the highest since June 3. The euro was flat at $1.07635 after plunging as low as $1.0733 on Monday, a level last seen on May 9, as gains by the far right in European Parliament elections spurred French President Emmanuel Macron to call a snap election. The U.S. dollar index, which measures the currency against the euro, yen and four other major peers, was little changed at 105.16, after reaching 105.39 on Monday for the first time since May 14. Economists polled by Reuters expect headline U.S. consumer price inflation to ease to 0.1% from 0.3% last month, and core price pressures to remain steady on the month at 0.3%. No policy change is expected at the conclusion of the Fed's two-day policy meeting ending Wednesday, but officials will also update their economic and interest rate projections. At the last such release in March, the median projection was for three quarter-point reductions this year, but officials have since turned much more hawkish. Traders currently see only 37 basis points of cuts by December. By contrast, many analysts and investors expect a 1 trillion yen ($6.36 billion) reduction in the BOJ's bond purchases to around 5 trillion yen per month, following media reports hinting at such a change from Reuters and other outlets. The BOJ and government are aligned on trying to limit yen weakness from scuppering a sought-after cycle of mild inflation and steady wage increases. The currency's plunge to a 34-year low of 160.245 per dollar at the end of April saw several rounds of official Japanese intervention worth a total of 9.79 trillion yen.