Informist, Thursday, Nov 16, 2023
By Vaishali Tyagi and Sourabh Kumar
MUMBAI – The rupee ended lower against the dollar today as banks persistently bought the greenback on behalf of oil marketing companies and other importers, dealers said.
After moving in a narrow range of 8 paise, the Indian unit settled at 83.2325 a dollar. It had settled at 83.1425 a dollar on Wednesday.
“Oilers (oil marketing companies) continue to buy (dollars), sometimes more, sometimes less, but they are there continuously,” said a dealer at a state-owned bank.
The rupee opened slightly lower as the dollar index recovered from the over-10-week low it touched on Wednesday after data showed that US retail sales in October fell less than anticipated.
In October, there was a 0.1% fall in US retail sales, as per data reported on Wednesday. Data for September was also revised upwards to show sales increasing 0.9% instead of the previously reported 0.7%. Economists surveyed by Reuters had forecast a fall of 0.3% in retail sales in October.
Meanwhile, US producer prices recorded the most significant decline in three-and-a-half years, primarily driven by a substantial decrease in gasoline costs, adding to bets of inflationary pressures cooling.
The producer price index for final demand declined 0.5% last month, the largest decrease since April 2020, data showed on Wednesday. Data for September was revised lower to show the PPI increasing 0.4% instead of 0.5% as previously reported.
At 1646 IST, the dollar index, which measures the strength of the greenback against a basket of six major currencies, was at 104.40, compared with 104.38 on Wednesday. It was at 104.06 on Tuesday. The index had declined to a low of over 10 weeks of 103.98 on Wednesday.
According to the CME Fedwatch Tool, 97.4% of Fed funds futures traders expect the rate-setting panel to hold the rate at the December meeting of the US Federal Open Market Committee.
The rupee, after a weak opening against the dollar, continued its downward movement as banks bought the greenback on behalf of oil marketing companies noting a fall in crude oil prices.
Oil prices fell more than 1.5% on Wednesday on a bigger-than-expected rise in US crude inventories and record production in the world’s biggest producer.
US crude stocks rose by 3.6 mln barrels last week to 421.9 mln bbl, according to the US Energy Information Administration, way above analysts’ expectations of a 1.8 mln bbl rise in a Reuters poll. The government data also showed that US crude production was holding at the record 13.2 mln bbl per day that it hit last month.
At 1641 IST, the January contract of Brent crude oil on the Intercontinental Exchange was at $81 a barrel from a high of $83.04 a bbl it touched on Wednesday. On Tuesday, crude oil price was at $82.47 a bbl.
Further, banks bought dollars for other importers, who considered the current dollar/rupee levels attractive, dealers said. This also weighed on the Indian unit, and it fell to the day’s low of 83.2475 a dollar.
However, a rise in domestic share indices limited losses for the Indian unit, dealers said. At 1651 IST, both the Sensex and the Nifty 50 were up 0.5%.
FORWARDS
Premiums on one-year dollar/rupee forwards ended slightly higher, tracking an intraday fall in US Treasury yields, dealers said.
US Treasury yields fell slightly after rising overnight despite a better-than-expected PPI for October.
Premiums on forwards of a currency pair are reflective of the interest rate differential between the two countries.
The premium on the one-year, exact-period dollar/rupee forward contract was at 129.64 paise, against 128.80 paise on Wednesday. On an annualised basis, the premium was at 1.55%, against the previous close of 1.54%.
OUTLOOK
On Friday, the rupee will take cues from movement in the dollar index after the release of US unemployment insurance weekly claims report, due later today.
The local currency will also take cues from movement in crude oil prices, dealers said.
“The range-bound movement we are seeing now should continue. It will take a big trigger for the rupee to move out of 83.00-83.30,” said a dealer with a private bank.
Dealers have pegged key technical resistance for the rupee at 82.80 a dollar and technical support at 83.50 a dollar. During the day, the rupee is seen in the range of 82.90-83.30 a dollar.
India Rupee – World FX: Australian dollar down on high unemployment rate
MUMBAI – The Australian dollar fell 0.3% against the US dollar as Australia’s unemployment rate ticked up to 3.7% in October, compared with 3.6% in September, according to data released by the Australian Bureau of Statistics today. The data indicates a slowing down of Australia’s economy and potentially rules out another rate hike by the Reserve Bank of Australia in December.
The pound sterling fell 0.1% against the US currency, as data released on Wednesday showed the UK’s CPI rose 4.6% on year in October, from September’s 6.7% rise. It was the lowest reading in two years and below the forecast of 4.8%. A lower CPI print suggests cooling down of the UK’s economy, making investors hopeful of a probable rate cut by the Bank of England sometime next year.
The Canadian dollar fell 0.1% against the greenback as crude oil prices fell. Canada is a major exporter of oil to the US.
The Japanese yen slipped 0.1% against the dollar.
The euro traded flat against the greenback. Industrial output in the eurozone fell 1.1% in September, according to figures published by Eurostat. This was more than The Wall Street Journal’s expectation of a 0.8% month-on-month fall.
The dollar index recovered from the over-10-week low it hit on Wednesday after data showed retail sales in the US fell less than expected. This raised doubts among investors of the US Federal Reserve’s timeline for cutting interest rates.
US retail sales declined 0.1% in October, against a forecast by Reuters that suggested a fall of 0.3%. Data for September was also revised upwards to show sales increasing 0.9% instead of the previously reported 0.7% rise.
At 1529 IST, the dollar index, which measures the strength of the greenback against a basket of six major currencies, was at 104.41, compared with 104.38 on Wednesday. It was at 104.06 on Tuesday. The index had declined to a low of over 10 weeks of 103.98 on Wednesday. (Sourabh Kumar and Vaishali Tyagi)
India Rupee: Falls as oil cos, importers persistently buy dollars
MUMBAI – The rupee fell against the dollar today as banks persistently bought the greenback on behalf of oil marketing companies and other importers, dealers said.
The rupee experienced downward pressure after opening at 83.1800 a dollar as importers bought dollars noting attractive levels, dealers said.
“Continuous buying interest is there clearly from oil buyers and importers,” a dealer at a private bank said. “There are the same routine things happening and nothing specific whenever there is buying, a little weakness comes to the rupee and towards the end of the day it closes around 83.25-83.26 (a dollar).”
Oil prices fell more than 1.5% on Wednesday on a bigger-than-expected rise in US crude inventories and record production in the world’s biggest producer.
US crude stocks rose by 3.6 mln barrels last week to 421.9 mln bbl, according to the US Energy Information Administration, way above analysts’ expectations of a 1.8 mln bbl rise in a Reuters’ poll. The government data also showed that US crude production was holding at a record 13.2 mln bbl per day that it hit last month.
At 1335 IST, the January contract of Brent crude oil on the Intercontinental Exchange was at $80.41 a barrel, against $81.18 a bbl on Wednesday. It was at $82.47 a bbl on Tuesday.
Further, the dollar index rebounded from the over 10-week low it touched on Wednesday after data showed that US retail sales in October fell lesser than anticipated and weighed on the Indian currency.
In October, there was a 0.1% fall in US retail sales, as per data reported on Wednesday. Data for September was revised higher to show sales increasing 0.9% instead of the previously reported 0.7% rise. Economists surveyed by Reuters had forecast a fall of 0.3% in retail sales.
At 1335 IST, the dollar index, which measures the strength of the greenback against a basket of six major currencies, was at 104.49, compared with 104.38 on Wednesday. It was at 104.06 on Tuesday. The index had declined to an over 10-week low of 103.98 on Wednesday.
Meanwhile, a slight rise in domestic share indices also limited losses for the Indian unit, dealers said. At 1335 IST, both the Sensex and the Nifty 50 were up 0.6%.
Dealers see immediate key technical support for the rupee at 83.30 a dollar. The rupee is seen at 82.90-83.20 against the dollar during the day. (Vaishali Tyagi)
India Rupee – Asia FX: Most units down as dlr recovers after US data
Most Asian currencies were down against the dollar today as the dollar index recovered from an over-10 week low it hit on Wednesday, after data showed retail sales in the US fell less than expected. This put investors in ambiguity over the US Federal Reserve’s timeline of cutting interest rates.
The US retail sales declined 0.1% in October, against a forecast by Reuters that suggested a fall of 0.3%. Data for September was revised higher to show sales increasing 0.9% instead of the previously reported 0.7% rise.
Investors seemed to have focused more on the retail sales data than on the producer price index, as the producer price index growth saw its sharpest decline in over three years amid falling prices of gasoline.
The producer price index in the US for final demand declined 0.5% last month, data from the Bureau of Labor Statistics showed. Data for September was revised to show the PPI increasing 0.4% instead of 0.5% as previously reported.
At 1014 IST, the dollar index, which measures the strength of the greenback against a basket of six major currencies, was at 104.52, compared with 104.38 on Wednesday. It was at 104.06 on Tuesday. The index had declined to an over 10-week low of 103.98 on Wednesday.
The Indonesian rupiah fell 0.5% against the greenback, even as the country registered a trade surplus in October, data from Statistics Indonesia showed on Wednesday. Exports from the country fell 10.4% on year in October, less than the previous month’s year-on-year drop of 16.2%.
The Malaysian ringgit was down 0.8% against the US currency. Malaysian Prime Minister Anwar Ibrahim said on Tuesday at a question and answer session at the University of California, Berkeley, that Malaysia is not tilting towards China, but geographically the country is closer, a reliable friend and ally. His comment came just a day before Chinese President Xi Jinping met with US President Joe Biden on Wednesday.
The Philippines peso and Thai baht were down 0.1% each against the greenback, while the Taiwan dollar rose 0.1% against the US unit. (Sourabh Kumar)
India Rupee:Largely steady as rebound in dlr index offsets crude fall
MUMBAI – The rupee was largely steady against the dollar today as the impact of a fall in crude oil prices was offset by a recovery in the dollar index, dealers said.
“Also, there is buying in the market due to fall in crude oil prices and cheaper rupee. Therefore, importers have incentives and there is no pressure on the selling side as there are no incentives for exporters,” said a dealer at a state-owned bank. “Yes, there is pressure from oil importers and defence sector.”
Crude oil prices fell more than 1.5% on Wednesday on a bigger-than-expected rise in US crude inventories and record output in the world’s biggest producer, along with rising concern about demand in Asia.
US crude stocks rose by 3.6 mln barrel last week to 421.9 mln bbl, according to the US Energy Information Administration, far exceeding analysts’ expectations in a Reuters poll for a 1.8-mln-bbl rise.
At 1000 IST, the January contract of Brent crude oil on the Intercontinental Exchange was at $80.41 a barrel, against $81.18 a bbl on Wednesday. It was at $82.47 a bbl on Tuesday.
The dollar index rebounded from the over a 10-week low it touched on Wednesday after data showed that US retail sales in October fell lesser than anticipated, dealers said.
Investors assessed the latest US economic data, which led to uncertainty among market participants about the US Federal Reserve’s timeline for interest rate cuts.
According to the CME Fedwatch Tool, 97.4% of Fed Funds futures traders expect the rate-setting panel to hold the fed funds rate at the upcoming December meeting of the US Federal Open Market Committee.
In October, there was a 0.1% fall in US retail sales, as per data reported on Wednesday. Data for September was revised higher to show sales increasing 0.9% instead of the previously reported 0.7% rise. Economists surveyed by Reuters had forecast a fall of 0.3% in retail sales.
Meanwhile, US producer prices recorded the most significant decline in three-and-a-half years, primarily driven by a substantial decrease in gasoline costs, adding to bets of cooling inflationary pressures.
The producer price index for final demand declined 0.5% last month, the largest decrease since April 2020, data showed on Wednesday. Data for September was revised lower to show the PPI increasing 0.4% instead of 0.5% as previously reported.
At 1000 IST, the dollar index, which measures the strength of the greenback against a basket of six major currencies, was at 104.53, compared with 104.38 on Wednesday. It was at 104.06 on Tuesday. The index had declined to an over 10-week low of 103.98 on Wednesday.
A slight rise in domestic share indices also supported the Indian unit, dealers said. At 1007 IST, both the Sensex and the Nifty 50 were up 0.1%.
Dealers see immediate key technical support for the rupee at 83.30 a dollar. The rupee is seen at 82.90-83.20 against the dollar during the day. (Vaishali Tyagi)
India Rupee: Expected range for rupee – Nov 16
MUMBAI – Following are the expected support and resistance levels for the rupee today, as forecast by leading banks and brokerages in an Informist poll:
(Sourabh Kumar)
End
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Akul Nishant Akhoury and Rajeev Pai
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