Mr. Sriram Iyer, Senior Research Analyst at Reliance Securities
The Indian Rupee depreciated on Wednesday as higher inflation from the U.S could taper of bond purchases sooner than expected.
The Rupee ended at 74.58 vs. 74.49 close on Tuesday.
Asian currencies also weakened this Wednesday and while several countries tightened restrictive measures as cases involving the virus' Delta variant increased and also weighed on sentiments.
The benchmark BSE Sensex and the broader NSE index ended higher by 0.25% and 0.26%, respectively on Wednesday.
The benchmark 6.10% bond maturing in 2031 ended at 99.93 rupees, yielding 6.11%, against 99.98 rupees, yielding 6.10% yesterday, as traders awaited fresh cues.
The U.S. Dollar Index crashed on Wednesday after Federal Reserve Chair Jerome Powell told Congress the U.S. economy was still a ways off from levels the central bank wanted to see before tapering its monetary support.
His comments came as a report showed U.S. producer prices rose more than expected, posting their biggest annual increase in more than 10-1/2 years. A day earlier, data showed June U.S. inflation hit its highest in more than 13 years.
The Euro and the Pound Sterling rose against the dollar on Wednesday, tracking broad Greenback weakness.
The Safe haven Japanese Yen also appreciated on Wednesday against the Greenback, amid safe haven appeal for the currency and weak dollar.
The Indian Rupee could start on a flat to stronger note this Thursday against the greenback as a dovish Fed pulled the dollar lower.
Asian currencies have started weak against the greenback this Thursday morning and could cap weakness.
The Rupee could likely open around 74.52-74.55 per dollar this Thursday morning vs. a close of 74.58 on Wednesday.
NDF is currently trading at 74.52 per dollar this Thursday morning vs. a close of 74.39 on Wednesday.
Technically, the USDINR Spot pair resistances are at 74.70 and 74.90. Supports are at 74.40 and 74.35. The USDINR Spot pair could trade in a range of 74.40-74.70 levels.
The U.S. Dollar Index was trading flat this Thursday morning in Asian trade.
The Euro and the Sterling have started flat against the Greenback this Thursday morning in Asian trade.
The Japanese Yen was marginally stronger this Thursday morning supported by safe haven appeal for the currency.
Technically, the Dollar Index is trading near the 9-day Daily Moving Average at $92.42 levels and trade above which continue to push the index further up to $92.85-$93.00 levels. However, a break below could pull the index to the 21-day Daily Moving Average support at $92.20.