Rupee opened lower, Dollar up vs. major currencies

Thursday,   28-May-2020   10:30 AM (IST)

The Indian rupee opened the day lower at 75.90/91 levels compared to its previous close at 75.7150/7250 levels weighed by broad decline in regional currencies amid mounting U.S.-China tensions over Hong Kong. Indian government bond yields trading little changed in early session, with volume thin on lack of fresh triggers. Equity markets were trading half a per cent higher today, in line with their Asian peers, ahead of the expiry of futures and options contracts of May series. At 10:38 AM, the S&P BSE Sensex was trading at 32, 003, up 398 point, while the broader Nifty50 was at 9,428 up 114 point. As per the technical indicators range for the USDINR pair may be 75.60-76.10 levels. Rupee has an immediate support at 75.95 levels. A breach of the same may see rupee at 76.06 followed by 76.16 levels. On the positive side rupee is likely to face resistance at 75.72 levels and if it is able to break the same then it may gain up to 75.61 levels followed by 75.50 levels.

The dollar held its own on Thursday as rising Sino-U.S. tension put crushing pressure on the Chinese Yuan and proved a counterweight to optimism about the coronavirus recovery. The escalating war of words between the world's two biggest economies also spilled over to the Australian and New Zealand dollars, as a far more cautious mood holds in currency markets compared with the ebullience rallying stocks. Hong Kong is the newest flashpoint, with U.S. Secretary of State Mike Pompeo saying on Wednesday that China's plan to impose laws there was "only the latest in a series of actions that fundamentally undermine" the city's autonomy and freedoms. The Chinese Yuan, a barometer of U.S.-China relations, hit a record low of 7.1966 per dollar in offshore trade overnight and held close to that level on Thursday at 7.1805. The Aussie and kiwi backed off two-month highs hit in the London session and were becalmed, even as the re-opening of the world's economies kept stock markets rallying. The Aussie was last at $0.6621 and the kiwi at $0.6188. Tensions have flared between Australia and China over the COVID-19 pandemic, while U.S.-China relations have nosedived amid regular attacks from the Trump administration over China's handling of the virus. The United States is currently crafting a range of options to punish China over its tightening grip on Hong Kong, including sanctions, tariffs and restrictions on Chinese companies, according to people familiar with the discussions. Elsewhere, the dollar was marginally firmer against the Japanese yen, at 107.83 yen per dollar, and a touch weaker on the euro and pound. Against a basket of currencies it was steady at 98.863, a fraction above a two-month low hit overnight. The euro rose to an eight-week peak of $1.1031 on Wednesday, climbing above its 200-day moving average, after the European Union's executive unveiled a 750 billion euro plan to prop up the bloc's virus-hit economies.