Rupee opened tad higher, Euro and Pound edges down vs. dollar

Monday,   22-Oct-2018   09:08 AM (IST)

The Indian rupee opened the day tad higher at 73.30/31 levels compared to its previous close at 73.32/33 levels due to dollar sales by private sector bank, probably on behalf of exporters. Data released late Friday shows India’s foreign exchange fell by over $5 billion in week ended Oct. 12, biggest weekly decline in seven years. Indian government bonds little changed in early trade tracking rupee and as Brent crude oil contract nears $80 per barrel mark. Minutes of India's October monetary policy meeting, released after market on October 19, were in line with policy statement. The equity market is off to a good start to the week, with the Nifty trading around 10,400 mark. Possible fall in crude prices is likely to have impacted the indices. At 09:19 am the Sensex is up 342.98 points or 1% at 34658.61, while the Nifty is higher by 96.10 points or 0.93% at 10399.60. As per the technical indicators range for the USDINR pair may be 72.90-73.65 levels. Rupee has an immediate support at 73.48 levels. A breach of the same may see rupee at 73.65 followed by 73.83 levels. On the positive side rupee is likely to face resistance at 73.14 levels and if it is able to break the same then it may gain up to 73.05 levels followed by 72.79 levels.

The euro and the British pound edged down against the dollar on Monday as investors awaited developments around Brexit as well as Italy's budget plan which drew heavy criticism from the European Union. The greenback hardly budged in early Asian trade, with a broad index (DXY) gauging its value against major peers trading flat at 95.73. Both the euro and sterling managed to hold firm, though traders said the currencies remained sensitive to news around Brexit and a controversial Italian budget proposal. The European Commission on Thursday sent Rome a letter calling a draft budget an "unprecedented" breach of EU fiscal rules. Italy now has until Monday to explain to the Commission its breach of rules and faces the rejection of its budget, which may eventually lead to sanctions. The euro lost 0.1 percent versus the greenback, changing hands at $1.15, having gained 0.5 percent versus the dollar on Friday. Sterling had also rallied on Friday after Bloomberg News reported that British Prime Minister Theresa May is ready to drop a key Brexit demand in order to make a deal for Britain to leave the European Union (EU). UK Brexit minister Dominic Raab said on Sunday that Britain is open-minded about extending the post-Brexit transition period if it means the European Union drops its proposals for the so-called Irish backstop. Sterling was fetching $1.3055, down 0.1 percent against the dollar having hit an intra-day low of 1.3009 on Friday. The euro and British pound rallied against the U.S. dollar on Friday. The Japanese yen was up 0.1 percent at 112.45, getting an early safety bid as stocks in Asia edged lower on concerns over global growth and corporate earnings. The Canadian dollar was changed hands at 1.3107 on its U.S. counterpart, within striking distance of a 5-week low of 1.3132 hit on Friday on the back of weaker inflation and retail sales. Yet, market participants expect the Bank of Canada (BoC) to raise interest rates on Oct. 24. The central bank has raised rates four times since July 2017 and has said it wants to contain inflation pressures.