Rupee opened higher, Dollar lower vs. major currencies

Monday,   20-Aug-2018   09:10 AM (IST)

The Indian rupee opened the day higher at 69.83/84 levels compared to its previous close at 70.15/16 levels amid a Chinese Yuan-led advance in regional currencies ahead of trade talks between the U.S. and China. Indian government bonds gain tracking recovery in Indian rupee that had slipped to record low last week; minutes of MPC minutes in line with policy stance also aid. The S&P BSE Sensex and the Nifty 50 index have opened at record highs. At 9:35 AM, the S&P BSE Sensex was trading at 38,158, up 210 points while the broader Nifty50 was ruling at 11,528, up 58 points. As per the technical indicators range for the USDINR pair may be 69.60-70.15 levels. Rupee has an immediate support at 70.00 levels. A breach of the same may see rupee at 70.12 followed by 70.38 levels. On the positive side rupee is likely to face resistance at 69.74 levels and if it is able to break the same then it may gain up to 69.62 levels followed by 69.46 levels.

The dollar sagged on Monday as investor demand for the safe-haven currency receded on optimism over a reduction in U.S.-China trade tensions, with the focus on discussions between the two countries due this week. Escalating trade tensions between the United States and its trading partners, in addition to a plunge in the Turkish lira, has taken a heavy toll on emerging market currencies. But the dollar's advance halted ahead of lower-level trade talks between Chinese and U.S. officials in Washington scheduled for Tuesday and Wednesday. Receding fears over the Turkish lira's late plunge on Friday reduced risk aversion in the broader markets, lifting the euro. The Turkish financial markets will be closed for national holidays August 21-24. Standard & Poor's cut Turkey's sovereign credit rating by one notch to B+ from BB- on Friday, sending it deeper into "junk" territory, citing extreme lira volatility and forecasting a recession next year. The Turkish lira had snapped a three-day rebound On Friday, sliding more than 5 percent against the dollar on fears the United States would impose more economic sanctions unless Turkey handed over detained American pastor Andrew Brunson. The euro, which had slid to a 13-month low early last week amid concerns that the Turkish crisis could hurt European banks managed to bounce on Friday, taking the lira's retreat in stride. The single currency rose 0.55 percent on Friday and last stood little changed at $1.1436. The offshore Chinese Yuan was effectively flat at 6.838 per dollar after gaining about 0.4 percent on Friday, when it pulled further away from a 19-month low of 6.9585 brushed on Wednesday.