Rupee opened lower, Yen higher vs. Dollar

Tuesday,   24-May-2022   09:52 AM (IST)

The Indian rupee opened the day lower at 77.56/57 levels compared to its previous close at 77.5150/5250 levels tracking decline in Asian shares and currencies amid interest rate risks. India's sovereign bond yields trading lower, amid value purchase as fears of any immediate rise in borrowing recede. The benchmark BSE Sensex and the broader NSE index turned higher as investors buying index stocks, even as Asian shares were marginally down. At 9:24 AM, the S&P BSE Sensex was trading at 54,461 up 172 point, while the broader Nifty50 was at 16,254 up 39 point. As per the technical indicators range for the USDINR pair may be 77.30-77.80 levels. Rupee has an immediate support at 77.64 levels. A breach of the same may see rupee at 77.77 followed by 77.85 levels. On the positive side rupee is likely to face resistance at 77.44 levels and if it is able to break the same then it may gain up to 77.32 levels followed by 77.24 levels.

The safe-haven dollar clawed back some of its overnight losses on Tuesday and the yen also strengthened as U.S. stock futures sank following a profit warning from Snapchat, souring the mood after Wall Street’s strong start to the week. The dollar index, which measures the currency against six major peers, added 0.1% to 102.24, bouncing after Monday’s 0.85% tumble took it further from the nearly two-decade peak above 105 marked mid-month. The greenback, though, slipped against pre-eminent haven currency the yen, dropping 0.18% to 127.695 yen. The euro retreated 0.21% to $1.0672, although barely denting the 1.17% surge from Monday, when European Central Bank President Christine Lagarde said policymakers were likely to lift the euro area deposit rate out of negative territory by the end of September. The risk-sensitive Aussie dollar dropped 0.46% to $0.7077, and sterling declined 0.22% to $1.2558. U.S. stock futures indicated a 0.81% slide for the S&P 500 and 1.41% tumble for the Nasdaq at the restart, tarnishing a strong session on Monday that saw the indexes climb 1.86% and 1.68% respectively. Traders pointed to an after-the-bell profit warning from Snapchat owner Snap, which saw the stock tumble 28% in extended trading. The dollar has been falling alongside a decline in Treasury yields from multi-year peaks, with aggressive easing by the Federal Reserve already priced in. Meanwhile, positive signs for the global economy such as Shanghai’s expected emergence from weeks of crippling COVID-19 lockdowns and U.S. President Joe Biden’s comments this week towards a possible easing of the trade war with China have lifted sentiment at the dollar’s expense. The release of global manufacturing PMIs over the course of Tuesday will be another key focus for currency traders.