Rupee opened flat, Yen higher vs. dollar

Friday,   08-Dec-2023   09:47 AM (IST)

The Indian rupee opened the day almost flat at 83.35/36 levels compared to its previous close at 83.3525/3625 levels ahead of the Reserve Bank of India's monetary policy decision, even as the dollar index dipped, pressured by a rally in the Japanese yen. The rupee's Asian peers were mostly rangebound except for the Korean won. Indian government bond yields flat in early trades with focus on RBI policy decision and guidance. Indian shares opened higher with the benchmark Nifty 50 hitting a fresh record high, ahead of RBI's monetary policy decision, where the bank is expected to stand pat on key rates for a fifth consecutive time. At 9:18 AM, the S&P BSE Sensex was trading at 69,627 up 105 points, while the broader Nifty50 was at 20,942 up 41points. As per the technical indicators range for the USDINR pair may be 83.15-83.45 levels. Rupee has an immediate support at 83.38 levels. A breach of the same may see rupee at 83.44 followed by 83.52 levels. On the positive side rupee is likely to face resistance at 83.28 levels and if it is able to break the same then it may gain up to 83.20 levels followed by 83.12 levels.

The yen extended its towering rally on Friday and marched toward its best week against the dollar in nearly five months, as traders ramped up expectations that the end of Japan's ultra-low interest rates was closing in. The broad strength from the yen kept a lid on the dollar, which stayed on the defensive ahead of the closely-watched U.S. nonfarm payrolls report due later on Friday. Bank of Japan (BOJ) governor Kazuo Ueda said on Thursday the central bank had several options on which interest rates to target once it pulls short-term borrowing costs out of negative territory, and had on the same day met with Prime Minister Fumio Kishida. Markets took those comments as the clearest sign yet that the BOJ could soon phase out its ultra-loose monetary policy and catapulted the yen to multi-month highs against its major peers. Against the dollar, the yen was last steady at 144.30, after having surged over 2% in the previous session and striking a four-month high of 141.60. The yen had, as recently as a month ago, fallen to a one-year low of 151.92 per dollar, coming under pressure as a result of growing interest rate differentials with the United States. That kept traders on edge over potential intervention from Japanese authorities to prop up the currency as it had done last year. The Japanese currency similarly stood near Thursday's four-month peak on the euro, and was last at 155.67 per euro. The Aussie meanwhile last bought 95 yen, retracing some of its losses from the previous session where it fell nearly 2%. Attention now turns to the BOJ's upcoming two-day monetary policy meeting on Dec. 18.