Informist, Wednesday, May 10, 2023
By Kabir Sharma
MUMBAI – The rupee recouped all losses and settled slightly higher against the dollar as banks sold the greenback for overseas investments into the initial public offering of Nexus Select Trust, dealers said.
The real estate investment trust has floated an initial public offer to raise 32 bln rupees, which includes fresh issue of 14 bln rupees and an offer-for-sale of 18 bln rupees. On Tuesday, the first day, the offer was subscribed 28%, according to data from Axis Capital Ltd, one of the lead managers of the issue.
The issue opened for subscription on Tuesday and will close on Thursday.
After touching a low of 82.0875 a dollar during the day, the rupee bounced back to end at 81.9850, as against Tuesday’s close of 82.0375. The Indian unit traded in a narrow range of 14 paise throughout the day.
The rupee opened lower against the dollar today as the greenback remained firm ahead of the release of US inflation data later today, dealers said.
“I don’t see the rupee stopping before 82.40-50 a dollar level if the CPI data comes in strong, the previous highs will become resistance (for dollar),” a dealer with a foreign bank said.
Inflation in the US is expected to have increased 0.4% on month in April, and 5% on year. Meanwhile, core inflation, which excludes food and energy components, is expected to have climbed 0.4%, according to a poll by Dow Jones.
At 1641 IST The dollar index was at 101.72 as against 101.61 on Tuesday and 101.38 on Monday.
However, some exporters were of the view that inflation data will be below expectations and hence the rupee will appreciate, so they sold the greenback below 82 levels which also supported the Indian unit.
Some dealers bought the greenback on behalf of oil marketing companies that were buying the commodity fearing a surge in prices going ahead, which weighed on the rupee.
Tuesday saw a slight increase in oil prices, reversing a decline of more than 2% earlier in the session, as traders took into account the US government’s intentions to replenish the country’s emergency oil stockpiles and anticipated greater seasonal demand.
After US President Joe Biden ordered the largest sale yet from the stockpiles last year, the administration may begin repurchasing crude oil for its Strategic Petroleum Reserves later this year, according to Energy Secretary Jennifer Granholm.
At 1706 IST, the June contract of Brent crude oil on the Intercontinental Exchange was at $76.70 a bbl as against $77.44 a bbl on Tuesday. It was at $77.01 a bbl on Monday.
FORWARDS
Premium on the one-year dollar/rupee forward contract ended flat today as traders avoided placing large bets ahead of the US inflation data for April, due later today, dealers said.
“There was some receiving seen initially during the day, but largely it was a quite market,” said a dealer with a private bank.
The premium on the one-year dollar/rupee contract was 179.16 paise, against 179.76 paise on Tuesday. On an annualised basis, the premium was at 2.17%, unchanged against the previous close.
OUTLOOK
On Thursday, the rupee will take cues from overnight movement in the dollar index and crude oil prices.
Market participants await the US CPI data for April due later today.
Dealers see immediate key technical support for the rupee at 82.20 a dollar. During the day, the rupee is seen in the range of 81.80-82.20 a dollar.
India Rupee – World FX: Dlr index up ahead of US CPI; BoE meet eyed
NEW DELHI – The dollar rose against major currencies ahead of the release of the crucial US Consumer Price Index data later today. The data will provide cues on the US Federal Reserve’s rate hike path going forward.
US CPI is expected to rise 0.4% on month in April, and 5% on year while the core CPI is projected to rise 0.4% on month, according to a Dow Jones poll. The US inflation data became all the more important since Fed Chair in its policy meeting last week said the chances of a pause remains contingent on economic data moving ahead.
At 1514 IST, the dollar index, which measures the strength in the greenback against a basket of six major currencies, was at 101.7 as against 101.61 on Tuesday. It was at 101.38 on Monday.
The pound sterling was largely flat against the US unit ahead of the Bank of England’s policy review meeting outcome on Thursday. The UK’s central bank is widely expected to raise interest rate by 25 basis points.
The euro and Australian dollar remained 0.1% down against the greenback. (Ananya Chaudhuri)
India Rupee: In thin band; volumes low as traders wary before US CPI
MUMBAI – The rupee traded in a narrow range against the dollar as market participants were cautious ahead of the release of US inflation data, due later today, dealers said. Volumes in the currency market were also subdued as traders were wary of placing large bets before the crucial data release.
“We are just waiting for US CPI, volumes are also dull. We see it (dollar/rupee) breaching 82.20 level if it surprises on the upside, anything above 5%,” a dealer with a foreign bank said.
The rupee has traded in a thin 12-paise range against the dollar so far.
Inflation in the US is expected to have increased 0.4% on month in April, and 5% on year. Meanwhile, core inflation, which excludes food and energy components, is expected to have climbed 0.4%, according to a poll by Dow Jones.
At 1344 IST The dollar index was at 101.72 as against 101.61 on Tuesday and 101.38 on Monday.
Some banks bought the greenback on behalf of oil marketing companies which also weighed on the rupee, dealers said. However, some banks sold dollars for exporters which supported the rupee, dealers said.
Dealers have pegged the next technical support for the rupee at 82.20 a dollar. During the day, the rupee is seen at 81.80-82.30 a dollar. (Kabir Sharma)
India Rupee: Slightly up as dlr down, banks sell dlrs for exporters
MUMBAI – The rupee rose slightly against the dollar today as the dollar index weakened slightly in early trade and as banks sold dollars likely for exporters, dealers said.
The dollar index weakened slightly during early trade after rising on Tuesday as market participants await the US inflation data due later today. Inflation in the US is expected to have increased 0.4% on month in April, and 5% on year. Meanwhile, core inflation, which excludes food and energy components, is expected to have climbed 0.4%, according to a poll by Dow Jones.
Fears of a default by the US due to an impasse over the country’s debt ceiling also weighed on market sentiment. Even after negotiations on Tuesday, US President Joe Biden and Speaker of the House Kevin McCarthy were still at odds over lifting the $31.4-trln debt ceiling, with only weeks left before the US may be forced into an unprecedented default.
At 0931 IST, the dollar index was at 101.55 as against 101.61 on Tuesday. It was at 101.38 on Monday.
The rupee was also aided as banks sold dollars likely for exporters, dealers said. “There is a lot of selling (dollars) now, traders who have hedged positions are selling after the rupee touched the 82.00 levels,” said a dealer with a state-owned bank.
However, a fall in the domestic share indices weighed on the Indian unit, dealers said. At 0948 IST, both Nifty 50 and the Sensex fell 0.1%.
Dealers have pegged the next technical support for the rupee at 82.20 a dollar. During the day, the rupee is seen at 81.80-82.30 a dollar. (Aiswarya Santhosh)
India Rupee – Asia FX:Most down as dlr firm ahead of US Apr CPI data
MUMBAI – Most Asian currencies were down against the dollar as the greenback remained firm ahead of the release of US inflation data, due later today.
Inflation in the US is expected to have increased 0.4% on month in April, and 5% on year. Meanwhile, core inflation, which excludes food and energy components, is expected to have climbed 0.4%, according to a poll by Dow Jones.
Bank of Japan President Kazuo Ueda said on Tuesday the central bank will end its yield curve flattening policy and then begin shrinking its balance sheet amid growing prospects that inflation will reach a sustainable 2% rate, this supported the yen and hurt the risk sentiment for emerging currencies.
The Malaysian ringgit and the South Korean won were down 0.2% against the dollar. Bucking the trend, the Thai Baht was up 0.2% against the greenback. (Kabir Sharma)
India Rupee: Expected range for rupee – May 10
MUMBAI – Following are the expected support and resistance levels for the rupee today, as forecasted by leading banks and brokerages in an Informist poll:
(Kabir Sharma)
End
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Aditya Sakorkar
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