Rupee opened higher, Dollar steady vs. major currencies

Tuesday,   10-Dec-2019   09:02 AM (IST)

The Indian rupee opened the day higher at 70.96/97 levels compared to its previous close at 71.0350/0450 levels but slipped to 71.0325/0425 levels in early deals on dollar buying by large state-run bank. Indian government bonds trading marginally higher on value purchase by traders after recent fall, even as market awaits state debt sale. Benchmark indices are trading flat with tech stocks under pressure. At 9:28 AM, the S&P BSE Sensex was trading at 40,463, down 24 point, while the broader Nifty50 was at 11,926, down 11 point. As per the technical indicators range for the USDINR pair may be 70.70-71.30 levels. Rupee has an immediate support at 71.14 levels. A breach of the same may see rupee at 71.36 followed by 71.48 levels. On the positive side rupee is likely to face resistance at 70.87 levels and if it is able to break the same then it may gain up to 70.76 levels followed by 70.57 levels.

The dollar and yen held the safe-haven high ground on Tuesday, with investors on edge ahead of a looming tariff deadline, the UK election and upcoming central bank meetings in Europe and the United States. Front of mind is whether Washington will go ahead with a fresh round of tariffs on Sunday, or whether a deal with China can be reached before then. White House economic adviser Larry Kudlow said on Friday that the Dec. 15 deadline is still in place, but Bloomberg reported Agriculture Secretary Sonny Perdue saying the tariffs are unlikely to take effect. Against the Japanese yen and the euro the greenback found support after last week's declines, steadying at 108.56 yen and $1.1064 per euro. Against a basket of currencies, the dollar last traded at 97.644. The Australian and New Zealand dollars were marginally stronger at $0.6824 and $0.6548, respectively. The U.S. dollar's recovery after weakness last week has been supported by a surge in hiring in November. That has investors almost certain that the U.S. Federal Reserve will hold rates steady on Wednesday, which has increased investors' focus on finding a trade-war truce. China said on Monday it hoped to make a trade deal with the United States as soon as possible, though gave no new details or insight into talks' progress. Elsewhere, the European Central Bank is likewise expected to keep interest rates steady, while the pound's fate is in the hands of voters at Thursday's British election. Sterling sat at $1.3144, just below a seven-month high hit last week, as polls pointed to a Conservative victory decisive enough to secure a parliamentary majority. A YouGov poll due at 2200 GMT will offer the latest guide.