The Indian rupee opened the day higher at 82.5525/5625 levels compared to its previous close at 82.6475/6575 levels following the U.S. dollar’s retreat from a three-month high after Federal Reserve Chair Jerome Powell’s comments at Jackson Hole. Near-maturity U.S. Treasury yields rose following Powell’s speech while longer maturity yields were mostly flat. Investors relieved as Jackson Hole symposium on Friday yielded no big surprises. China’s measures to boost investor sentiment lifts risk mood. Indian government bond yields largely unchanged in early trading as U.S. Treasuries remain elevated after hawkish comments from Fed Chair Powell. Indian shares opened higher tracking Asian peers after China announced new measures to support its struggling markets, and as the markets weathered a slightly hawkish U.S. interest rate outlook. At 9:48 AM, the S&P BSE Sensex was trading at 64,968 up 81 points, while the broader Nifty50 was at 19,291 up 25 points. As per the technical indicators range for the USDINR pair may be 82.40-82.80 levels. Rupee has an immediate support at 82.68 levels. A breach of the same may see rupee at 82.77 followed by 82.84 levels. On the positive side rupee is likely to face resistance at 82.46 levels and if it is able to break the same then it may gain up to 82.36 levels followed by 82.27 levels.
The dollar eased from a 12-week peak on Monday as traders weighed the U.S. monetary path after the Fed Chair Jerome Powell left open the possibility of further interest rate increases, while the yen hovered close to its lowest in over nine months. In an eagerly awaited speech at the annual Jackson Hole Economic Policy Symposium, Federal Reserve Chair Powell promised to move with care at upcoming meetings as he noted both progress made on easing price pressures as well as risks from the surprising strength of the U.S. economy. “We will proceed carefully as we decide whether to tighten further or, instead, to hold the policy rate constant and await further data,” Powell said in a keynote address. “It is the Fed’s job to bring inflation down to our 2% goal, and we will do so.” The dollar index, which measures the U.S. currency against six rivals, eased 0.115% to 104.05, but not far from the 12 week high of 104.44 it touched on Friday. The index is up over 2% in August and set to snap a two month losing streak. Markets anticipate an 80% chance of the Fed standing pat next month, the CME FedWatch tool showed, but the probability of a 25 basis point hike in November is now at 48% versus 33% a week earlier. A series of strong U.S. economic data releases has helped ease worries of a recession but with inflation still above the Fed’s target, some investors are worried that the U.S. central banks will keep interest rates at elevated levels for longer. With the Fed highlighting the importance of the upcoming U.S. economic data, investor focus this week will firmly be on reports on payrolls, core inflation and consumer spending. The yen weakened 0.03% to 146.45 per dollar, not far off the more than nine month low of 146.64 it touched on Friday as traders continue to watch out for any signs of intervention in the currency market from Japanese authorities. The Bank of Japan will maintain its current ultra-easy policy as underlying inflation in Japan remains “a bit below” its target, the central bank’s governor said on Saturday. Meanwhile, the euro and the sterling came off two-month lows touched on Friday.