Rupee opened marginally higher, Dollar higher vs. major currencies

Friday,   03-Dec-2021   10:46 AM (IST)

The Indian rupee opened the day little changed at 74.98/99 levels compared to its previous close at 74.9950/75.0050 levels as traders await US jobs report that is expected to show continued improvement in labor market. India’s federal government bond yields trading largely unchanged, as traders await fresh supply via debt auction and developments on the impact of Omicron variant of coronavirus. Indian shares rose on Friday, as gains in technology and energy stocks helped markets push past concerns around the discovery of two cases of the new Omicron coronavirus variant in the country a day earlier. At 10:23 AM, the S&P BSE Sensex was trading at 58,315 down 146 point, while the broader Nifty50 was at 17,367 down 35 point. As per the technical indicators range for the USDINR pair may be 74.75-75.20 levels. Rupee has an immediate support at 75.08 levels. A breach of the same may see rupee at 75.17 followed by 75.26 levels. On the positive side rupee is likely to face resistance at 74.90 levels and if it is able to break the same then it may gain up to 74.81 levels followed by 74.68 levels.

The dollar ticked higher on Friday amid a broadly calmer tone in markets as fears over Omicron's impact eased, but currency moves were muted ahead of a key U.S. payrolls report that could clear the path to earlier Federal Reserve interest rate hikes. Scientists in South Africa, where the Omicron variant was first discovered last month, said existing vaccines should still protect against severe disease and death. The three Omicron cases identified in the U.S. also all displayed mild symptoms. Elsewhere, Fed officials speaking on Thursday joined Chair Jerome Powell in striking hawkish stances, with San Francisco Fed President Mary Daly saying it may be time to "start crafting a plan" to raise rates to combat inflation, and Richmond Fed President Thomas Barkin throwing his support for "normalizing policy." The dollar index, edged higher for a third day, rising 0.03% to 96.117. For the week, the dollar is little changed, despite a steep drop on Tuesday. Friday of last week though, the index had plunged 0.70%, the most since May. Powell reiterated in testimony to Congress on Wednesday that he and fellow policymakers will consider swifter action at their Dec. 14-15 meeting. Economists in a Reuters poll estimate the United States created 550,000 new jobs last month, continuing a run of strong data. Money market see high odds that the Fed will raise the target rate by a quarter point at its June meeting. The dollar slipped 0.09% to 113.10 yen on Friday, but that came after a 0.4% gain overnight. The euro was little changed at $1.13025, consolidating after its drop to an almost 17-month low at $1.1186 last week. The risk-sensitive Australian dollar eased 0.12% to $0.7084, a fourth losing session. Both the European Central Bank and Reserve Bank of Australia have stuck to dovish stances, pushing back against market bets that policymakers will be forced to bow to inflationary pressures.