Mr. Sriram Iyer, Senior Research Analyst at Reliance Securities
The Indian Rupee depreciated against the dollar as an expected 50-basis-point rate hike by the Federal Reserve next month broadly dented appetite for global risk assets.
The Rupee ended at 76.69 the weakest since March 8 and compared with 76.48 close on Friday.
The local unit briefly weakened to an intraday low of 76.76 earlier in the day, as the dollar index climbed to the highest since March 2020.
Most Asian and EM peers currencies and shares were weak this Monday with the Indian benchmark BSE Sensex equity index, falling about 0.9%, while the Chinese offshore Yuan tumbling by 1.24%.
Some support came in the form of falling oil prices, however fears about a potential recession in the United States and Covid-19 lockdowns in China will dent appeal for riskier assets which prompt FPI selling assets in the local markets and weighed on the Rupee today as well.
NDF is currently trading at 76.68/73 vs a close at 76.41 close on Friday.
Technically, if the USDINR Spot pair sustain above 76.70 level it could witness a upside momentum up to the resistance zone at 76.89-77.12. A break below could pull the pair to the support zone at 76.57-76.40 levels. The USDINR Spot pair could trade in a range of 76.55-76.98 levels in coming session.
The Indian government bond yields tumbled on Monday, with the 10-year yield posting its biggest fall in 20 months, amid short covering after the fall in oil prices and U.S. Treasury yields.
The yield on the benchmark 6.54% bond ended 7.04% against 7.17% close on Friday.
In the overseas markets, the Dollar is trading stronger this Monday evening in Asian trade, lifted by as a wave of risk aversion swept through global markets, boosting the greenback's safe haven appeal.
The Euro, the Sterling were weaker, while the Yen was stronger this Monday evening in Asian trade.
Technically, if Dollar Index breakout sustains above $101.50 level it could witness a upside momentum up to the resistance zone at $101.77-$101.95 levels. A break below could pull the pair to the support zone at $101.45-$101.33 levels.