MUMBAI, March 17 (Reuters) - The Indian rupee
strengthened against the U.S. dollar on Friday, as risk assets
got some relief following bank rescues in the U.S. and Europe,
with the local currency holding near a key resistance zone.
The rupee was trading around 82.46 per dollar at
11:15 a.m. IST, compared to its previous close of 82.73.
The currency strengthened past the key 82.50-level and we do
expect some more dollar sales as risk appetite has improved, but
the 82.40-82.50 zone tends to be an area of resistance, a trader
said.
If the currency manages to strengthen past it in a
sustainable manner, then further gains are likely, the trader
added.
After a week of turmoil in the markets over bank failures in
major economies, Asian shares and currencies rebounded on
Friday, as the dollar index fell 0.3%.
U.S. stocks set the tone overnight, with the S&P 500 index
rallying nearly 2% on news that a large group of banks were
infusing cash into First Republic Bank.
The recovery in shares of European lender Credit Suisse,
after it received help from Switzerland's central bank to shore
up its liquidity, further helped revive risk appetite.
"Heading into the day, we expect the rupee to trade with an
appreciation bias," HDFC Bank economists wrote in a note.
Besides improved risk sentiment, low crude oil prices could
support the currency, they added.
Oil prices have eased drastically as Brent crude futures
fell over 8% this week to $75.43 per barrel. Meanwhile, the European Central Bank on Thursday pushed
ahead with a 50 basis point hike despite strains in the banking
sector.
That, along with robust U.S. labour data has given more
confidence to markets that the Federal Reserve would increase
rates by 25 bps meeting next week. Some economists earlier
reckoned a pause from the Fed was possible. (Reporting by Anushka Trivedi; Editing by Varun H K)
anushka.trivedi.thomsonreuters.com@reuters.net))
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