Rupee opened lower, Euro lower vs. Dollar

Friday,   24-Jan-2020   09:02 AM (IST)

The Indian rupee opened the day lower at 71.33/34 levels compared to its previous close at 71.2650/2750 levels and is trading little changed in early deals as traders consider latest updates on China virus. India's federal government bonds flattish ahead of INR140 billion weekly debt sale; benchmark at INR98.97, yielding 6.59%, against INR98.92 previous close. Benchmark indices were trading flat with a negative bias. At 9:24 AM, the S&P BSE Sensex was trading at 41,313, down 73 point, while the broader Nifty50 was at 12,159, down 21 point. As per the technical indicators range for the USDINR pair may be 71.10-71.45 levels. Rupee has an immediate support at 71.39 levels. A breach of the same may see rupee at 71.45 followed by 71.56 levels. On the positive side rupee is likely to face resistance at 71.21 levels and if it is able to break the same then it may gain up to 71.10 levels followed by 71.02 levels.

The euro hovered near a seven-week low against the dollar on Friday after the European Central Bank was seen as more dovish than expected, while anxiety over China's coronavirus outbreak propped up the safe-haven yen. The euro stood at $1.1055, touching a seven-week low of $1.1036 hit in U.S. trade on Thursday after the ECB held interest rates steady and launched a broad review of its policy. ECB President Christine Lagarde on Thursday sought to redefine the ECB's main goal and how to achieve it, as years of the central bank's experiment with negative interest rates and quantitative easing have failed to deliver targeted inflation levels. Lagarde told a news conference that risks to growth in the euro zone remained tilted to the downside and traders took her overall tone as dovish. Purchasing Managers' Index (PMI) data from Germany and the euro zone due later on Friday is the next focus for the currency. The common currency was also undermined by the coronavirus threat in China because some countries in the currency bloc, notably Germany, have big trade exposures to the Asian economic giant. Concerns about the new disease bolstered the yen, which traded at 109.55 yen to the dollar, having risen to a two-week high of 109.26 on Thursday. The World Health Organisation (WHO) said on Thursday it was "a bit too early" to declare the new coronavirus a global health emergency, providing financial markets with some relief. Yet many investors were anxious as China took the unprecedented measure of closing transportation networks in Wuhan, putting millions of people in lockdown. The Australian dollar fetched $0.68415 , having erased all of the gains made after a firm payrolls figure the previous day, and was on track for a fourth consecutive week of losses. On top of worries about the damage from coronavirus, the currency has been dogged by concerns over the fallout from bushfires that have been ravaging the country for weeks. Elsewhere, sterling traded at $1.3123, little changed on the day but up 0.9% so far this week as solid UK economic data prompted traders to wind back expectations of a rate cut by the Bank of England at its policy meeting next week. The country's PMI data, due at 9:30 a.m. local time (0930GMT) on Friday, is now being closely watched for clues on the BoE's move at its policy decision on Jan. 30.