Informist, Wednesday, Aug 30, 2023
By Ananya Chaudhuri
NEW DELHI – The rupee ended off its earlier lows against the dollar today as banks persistently sold the greenback on account of foreign fund inflows, dealers said.
Today, after falling to a low of 82.8075 against the US unit, the Indian currency settled at 82.7325 compared to 82.7050 a dollar on Tuesday.
The rupee started the day largely steady against the US unit as a rise in crude oil prices offset the impact of a fall in the dollar index, dealers said.
Shortly after opening, the Indian currency touched the day’s high of 82.6500 against the greenback.
The Indian unit started to depreciate and hit the day’s low of 82.8075 against the US unit as banks rushed to purchase the greenback on behalf of oil marketing companies and for foreign fund outflows from an Indian corporate.
Dealers said banks purchased the US currency on account of Tiger Global and SoftBank Vision Growth Fund selling 1.4% and 1.7% stake, respectively, in Zomato, the food delivery platform, on Monday.
“The rupee is continuously depreciating. This can be attributed to surge in oil prices due to supply disruption,” a dealer at a big state-owned bank said. “And also, there’s a lot of (dollar) buying from the oilers’ side.”
Crude oil futures rose to $86.00 a barrel in two weeks tracking losses in the greenback against six major currencies on lower-than-expected new job openings in the US. A fall in the greenback makes dollar-denominated oil less expensive for investors of other currency holders, thereby, supporting demand.
At 1634 IST, the October contract of Brent crude oil on the Intercontinental Exchange was at $85.98 a bbl as against $85.49 a bbl on Tuesday. It was at $84.42 a bbl on Monday. Prices rose to as much as $86.17 a bbl during the day.
However, the rupee erased 7 paise losses against the US unit as banks stepped in to sell dollars on account of foreign fund inflows into an Indian corporate, dealers said.
Some dealers said banks might have sold the US unit at around 82.80 a dollar level likely on behalf of the Reserve Bank of India to contain volatility in the Indian currency.
Further, in European trade, the dollar index extended losses as data showed new job openings and consumer confidence in the US fell more than expectation. This too supported the Indian unit, dealers said.
“Yesterday, two important data came out (from US). JOLTS (Job opening Labor Turnover Survey) came ou to be at 8.8 mln (in July) vs 9.4 mln new jobs expected. It was a lot worse,” a dealer at a big state-owned bank said. “Also, US consumer confidence data came at 106.1 (in August), worse than expected. Both these data contributed to dollar index lowering.”
Market participants await the US Apr-Jun GDP’s second estimate, due later today, to assess the status of the world’s largest economy for fresh cues about the US Federal Reserve’s monetary policy going forward.
At 1635 IST, the dollar index, which measures the strength of the greenback against a basket of six major currencies, was at 103.46 as against 104.06 on Tuesday. It was at 104.08 on Monday.
FORWARDS
Premiums on the one-year dollar/rupee forwards ended higher, tracking a fall in US Treasury yields dealers said.
US Treasury yields plunged Tuesday after data showed new job openings, consumer confidence fell more than expectation in the world’s largest economy.
Premiums on forwards of a currency pair are reflective of the interest rate differential between two countries.
The premium on the one-year dollar/rupee contract was 134.26 paise, against 133.26 paise on Tuesday. On an annualised basis, the premium was at 1.60%, against the previous close of 1.59%.
OUTLOOK
On Thursday, the rupee will take cues from the dollar index and crude oil prices, dealers said. The Indian currency may also track the offshore Chinese yuan, they said.
“As we await US GDP, which is expected to come at 2.4%, ADP employment non-farm payroll, US core PCE (personal consumption expenditures index) prices and pending home sales, we expect rupee to be in 82.60 to 82.90 (a dollar) tomorrow,” Anil Kumar Bhansali, head of treasury and executive director, Finrex Treasury Advisors LLP.
Amongst the batch of key economic data is the revised reading on Apr-Jun GDP later today. Readings on personal consumption expenditures, the US Federal Reserve’s preferred inflation gauge, are due on Thursday, while August nonfarm payrolls will be released on Friday.
Dealers have pegged key technical support for the rupee at 82.80 a dollar. During the day, the rupee is seen in the range of 82.40-82.90 a dollar.
India Rupee – World FX: Australian dlr falls as Jul inflation eases
NEW DELHI – The Australian dollar fell 0.2% against the dollar after inflation in the country slowed to a 17-month low in July.
Data from the Australian Bureau of Statistics today showed monthly CPI rose 4.9% in the year to July, down from 5.4% the previous month and below market expectation of 5.2%.
This reinforced expectations that the Reserve Bank of Australia would pause its rate hikes for the third consecutive month in September.
Meanwhile, the euro was flat against the US unit ahead of the Eurozone inflation data, which is due on Thursday.
The dollar index fell after data showed that US job openings fell in July, bolstering expectations that the Federal Reserve will keep interest rates unchanged next month.
Job openings, a measure of labour demand, were down 338,000 to 8.8 mln in July, the lowest level since March 2021. Economists polled by Reuters had forecast 9.465 mln job openings.
At 1558 IST, the dollar index, which measures the strength of the greenback against a basket of six major currencies, was at 103.51 as against 104.06 on Tuesday. It was at 104.08 on Monday.
Market participants are now awaiting a slew of crucial US economic data, including a revised reading on Apr-Jun GDP, due later today and the US personal consumption expenditures index on Thursday. They are also waiting for the US jobs report for August, due on Friday. (Pratiksha)
India Rupee: Falls as banks buy dollars for oil cos, FX outflows
NEW DELHI – The rupee fell against the dollar today as banks persistently bought the greenback on behalf of oil marketing companies, and also because of foreign fund outflows, dealers said.
“All the indicators are in rupee’s favour but due to some (dollar) outflows it (rupee) is going down,” a dealer at a state-owned bank said. “Oilers are also buying (dollars).”
Dealers said banks purchased the US currency on account of Tiger Global and SoftBank Vision Growth Fund selling 1.4% and 1.7% stake, respectively, in Zomato, a food delivery platform on Monday.
A rise in crude oil prices weighed on rupee, dealers said. Oil future prices rose tracking losses on the greenback against six major currencies on lower-than-expected US new jobs opening data.
A fall in the greenback makes dollar-denominated oil less expensive for investors of other currency holders, thereby, supporting demand.
At 1254 IST, the October contract of Brent crude oil on the Intercontinental Exchange was at $85.91 a bbl as against $85.49 a bbl on Tuesday. It was at $84.42 a bbl on Monday.
Nevertheless, gains on domestic equity indices restricted losses for the local unit, dealers said. At 1254 IST, both the Nifty 50 and Sensex were up 0.5%.
Market participants now await the US Apr-Jun GDP’s second estimate release later today to assess the status of the world’s largest economy for fresh cues about the US Federal Reserve’s monetary policy going forward.
Dealers see key technical support for the rupee at 82.80 a dollar. During the day, the rupee is seen in the range of 82.50-82.80 a dollar. (Ananya Chaudhuri)
India Rupee: Largely steady as rise in crude offsets dlr index fall
NEW DELHI – The rupee was largely steady against the dollar as a rise in crude oil prices offset the impact of a fall in the dollar index, dealers said.
“Looking at the amount of fall in the dollar index, the rupee should’ve opened much higher, but I think the rise in crude is not letting it appreciate,” said a dealer with a state-owned bank. “Fall in yuan may also be impacting.”
The dollar index fell after data showed that US job openings fell in July, bolstering expectations that the Federal Reserve will keep interest rates unchanged next month, dealers said.
Job openings, a measure of labour demand, were down 338,000 to 8.8 mln on in July, the lowest level since March 2021. Economists polled by Reuters had forecast 9.465 mln job openings.
At 0936 IST, the dollar index, which measures the strength of the greenback against a basket of six major currencies, was at 103.59 as against 104.06 on Tuesday. It was at 104.08 on Monday.
Meanwhile, crude oil prices rose over 1% on Tuesday as the dollar fell against a basket of major currencies. A fall in the greenback makes dollar-denominated oil less expensive for investors of other currency holders, thus, supporting demand.
A rise in crude oil prices increases India’s import bill which, in turn, weighs on the currency.
At 0936 IST, the October contract of Brent crude oil on the Intercontinental Exchange was at $85.77 a bbl as against $85.49 a bbl on Tuesday. It was at $84.42 a bbl on Monday.
A rise in domestic share indices lent support to the Indian unit, dealers said. At 0936 IST, both the Nifty 50 and Sensex were up 0.4% each.
Market participants are now waiting for the release of the US personal consumption expenditures index on Thursday and the US jobs report for August on Friday to get more cues on the Fed’s monetary policy path going ahead.
Dealers see key technical support for the rupee at 82.80 a dollar. During the day, the rupee is seen in the range of 82.50-82.80 a dollar. (Pratiksha)
India Rupee – Asia FX:Most up as dlr index falls on weak US jobs data
NEW DELHI – Most Asian currencies rose against the dollar today as the dollar index fell after data showed new job opening in the US declined more than expected in July. This fuelled hopes the US Federal Reserve may not go for further rate hikes in the near future.
The job openings and labour turnover survey released Tuesday showed new job openings in the US fell by 338,000 to 8.8 mln in July, the lowest level since March 2021. Economists polled by Reuters had forecast 9.465 mln job openings.
Further, US consumer confidence index fell to 106.1 this month from 114 in July, Conference Board said. This was much lower than Dow Jones estimate of 116.
According to the CME Group’s FedWatch tool, Fed fund futures traders see an 86.5% probability of the Fed standing pat on interest rates in September, while the rest expect a 25 bps rate hike.
At 0911 IST, the dollar index, which measures the strength of the greenback against a basket of six major currencies, was at 103.6 as against 104.06 on Tuesday. It was at 104.08 on Monday.
Most of the Asian currencies rose in the range of 0.1-0.2% against the greenback with the Malaysian ringgit emerging as the best performing currency among its Asian peers. The Malaysian ringgit rose 0.2% against the US currency.
Bucking the trend, the Thai baht and the offshore Chinese yuan fell 0.2% and 0.1% against the US currency, respectively. (Ananya Chaudhuri)
India Rupee: Expected range for rupee – Aug 30
NEW DELHI – Following are the expected support and resistance levels for the rupee today, as forecasted by leading banks and brokerages in an Informist poll:
(Pratiksha)
End
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Aditya Sakorkar
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