Rupee opened higher, Dollar lower vs. major currencies

Wednesday,   24-Apr-2024   09:58 AM (IST)

The Indian rupee opened the day higher at 83.30/31 levels compared to its previous close at 83.3425/3525 levels aided by an uptick in its Asian peers, but traders reckon hedging demand from importers could limit rupee's upside. Asian currencies rose between 0.1% and 0.6%, with the Korean won leading gains. Indian government bond yields flattish in early trade after declining in the first two sessions of the week. Indian shares inched higher led by gains in metals and auto stocks, with the focus on quarterly results from multiple Nifty 50 companies this week. At 9:18 AM, the S&P BSE Sensex was trading at 73,885 up 144 points, while the broader Nifty50 was at 22,405 up 37 points. As per the technical indicators range for the USDINR pair may be 83.20-83.40 levels. Rupee has an immediate support at 83.35 levels. A breach of the same may see rupee at 83.42 followed by 83.48 levels. On the positive side rupee is likely to face resistance at 83.22 levels and if it is able to break the same then it may gain up to 83.16 levels followed by 83.10 levels.

The dollar nursed its wounds on Wednesday following big tumbles against the euro and sterling, hurt by a combination of surprisingly robust European activity data and cooling U.S. business growth. However the yen remained mired near a 34-year low versus the U.S. currency, even as Japanese officials stepped up intervention warnings. The dollar index - which measures the currency against six major peers including the euro, sterling and yen - was flat at 105.64 in early Asian trading after slumping 0.4% overnight and touching the lowest level since April 12 at 105.23. The euro was little changed at $1.069975 following Tuesday's 0.45% rally, after data showed business activity in the euro zone expanded at its fastest pace in nearly a year, primarily due to a recovery in services. Sterling also benefited from overnight data showing British businesses recorded their fastest growth in activity in nearly a year, while Bank of England Chief Economist Huw Pill said interest rate cuts remained some way off. Sterling was last steady at $1.24485 having jumped 0.79% in the previous session. By contrast, U.S. business activity cooled in April to a four-month low due to weaker demand, while rates of inflation eased slightly, suggesting some possible relief for the Federal Reserve. A major test of that will come Friday with the release of the Fed's preferred consumer inflation measure, the PCE deflator. Markets currently price in a 73% chance of a first rate cut by September, according to the CME's FedWatch tool. Elsewhere, the Australia's dollar hovered at the highest since April 15 at $0.64875 ahead of consumer inflation figures, after rebounding more than 1% over the past two days following its dip to a five-month low on Friday. The dollar index reached a 5-1/2-month peak at 106.51 last week as persistent inflation forced Fed officials to signal no rush to ease policy. Despite the dollar's broader struggles on Tuesday, it still inched up enough at one point to mark a fresh 34-year high to the yen at 154.88. This week, the pair has oscillated in an extremely narrow range between that high and a low of 154.50, with traders wary that a push above 155 could raise the risk of dollar-selling intervention by Japanese officials. Japanese Finance Minister Shunichi Suzuki on Tuesday issued the strongest warning to date on the chance of intervention, saying last week's meeting with U.S. and South Korean counterparts had laid the groundwork for Tokyo to act against excessive yen moves. The Bank of Japan is widely expected to leave policy settings and bond purchase amounts unchanged at the conclusion of a two-day meeting on Friday, having just raised interest rates for the first time since 2007 just last month. And while Japan's central bank is likely to signal a readiness to tighten policy again this year, its ultra-cautious, data-dependent approach has limited any strengthening in the yen.