Informist, Thursday, Jan 11, 2024
By Vaishali Tyagi
MUMBAI – The rupee pared all early gains and ended steady against the dollar today as the impact of dollar sales by foreign banks from foreign fund inflows into domestic equities was offset by dollar buys by domestic banks for oil marketing companies, dealers said.
“There was quite a movement today as we saw there was selling (of dollars) in the morning today, which took the rupee to 82.92-82.93 (a dollar) level, but some buying (of dollars) came in there at that level from oil marketing companies,” a dealer with a private bank said. “Also, we are waiting for the US CPI data which will come today, and it will decide further movements in the rupee.”
After rising to a high of 82.9250 a dollar during the day, the rupee settled at 83.0275 a dollar, as against Wednesday’s close of 83.0350 a dollar. The Indian unit moved in a range of 15 paise today.
The Indian unit had opened steady against the dollar as market participants refrained from placing large bets ahead of the release of US CPI data for December, due later today, dealers said.
Traders await the key economic data for further cues on when the US Federal Reserve will start cutting interest rates. The headline inflation is expected to rise 0.2% month-on-month and 3.2% on year, according to a Reuters poll.
According to the CME Group’s FedWatch Tool, Fed funds futures traders expect a 67.1% chance of rate cuts by the Fed at its March meeting.
At 1538 IST, the dollar index, which measures the strength of the greenback against a basket of six major currencies, was at 102.34 compared with Wednesday’s high of 102.64. It was 102.50 on Tuesday.
A few hours into the trading session, the rupee rose to the day’s high of 82.9250 a dollar as foreign banks persistently sold the greenback for foreign fund inflows into domestic equities, dealers said.
During the latter half of the day, the Indian unit fell to the day’s low of 83.0775 a dollar as banks bought the greenback on behalf of oil marketing companies, noting relatively lower dollar/rupee levels, dealers said.
A slight rise in crude oil prices also weighed on the Indian currency. Oil prices rose on Thursday after an armed group boarded an oil tanker in Oman, raising the prospect of escalating conflict in West Asia, according to media reports. Oil prices had fallen by over a dollar a barrel on Wednesday. A fall in oil prices reduces India’s import bill, which supports the currency.
Data released by the Energy Information Administration showed that crude inventories in the US rose by 1.3 mln bbl, to 432.4 mln bbl in the week ended Friday. A Reuters poll showed the respondents expecting a 700,000-bbl drop in the inventories, thereby catching the market by surprise.
At 1636 IST, the March contract for the Brent crude oil on the Intercontinental Exchange was at $78.07 a bbl compared with $76.80 a bbl on Wednesday, and Tuesday’s close of $77.59 a bbl.
Dealers said the absence of the Reserve Bank of India’s intervention through dollar purchases also supported the Indian unit, dealers said.
FORWARDS
The premiums on one year dollar/rupee forwards were slightly higher today ahead of the release of US inflation data for December, due later today, dealers said.
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 154.50 paise, against 153.00 paise on Wednesday. On an annualised basis, the premium was 1.86%, against Wednesday’s close of 1.83%.
OUTLOOK
On Friday, the rupee will take cues from movement in the dollar index post the release of US inflation data for December, dealers said. The rupee may also take cues from crude oil prices, they said.
During the day, the rupee is seen in a range of 82.90-83.30 a dollar, with key technical resistance pegged at 82.90 a dollar.
India Rupee – World FX: Dollar falls ahead of US CPI data later today
India Rupee – World FX: Dollar falls ahead of US CPI data later today
MUMBAI – The US dollar fell against most major currencies ahead of the release of US CPI data for December, due later today. The US headline inflation is expected to rise 0.2% on month and 3.2% on an annual basis in December, according to a Reuters poll.
Market participants await the key economic data for further cues on the US Federal Reserve’s interest rate path. At 1421 IST, the dollar index, which measures the strength of the greenback against a basket of six major currencies, was at 102.25 compared with 102.35 on Wednesday. It was 102.50 on Tuesday.
The pound sterling rose 0.2% against the greenback as investors await UK November monthly GDP estimates due Friday.
The Australian dollar rose 0.2% against the US unit. Both the Japanese yen and Canadian dollar also strengthened 0.2% against the US unit.
The euro was largely flat against the greenback ahead of the release of the Eurozone quarterly balance of payments and quarterly sectoral accounts data, due later today. (Vaishali Tyagi)
India Rupee: Tad up on dlr sales for FX inflows; oil cos’ buys weigh
MUMBAI – The rupee was a tad up against the dollar today as foreign banks persistently sold the greenback for foreign fund inflows into domestic equities, dealers said. At 1257 IST, the Nifty 50 and the Sensex were up 0.3% and 0.2%, respectively.
“Foreign banks are selling continuously since morning for inflows, but there was some buying by OMCs (oil marketing companies) around 92-93 levels,” a dealer at a big state-owned bank said. “Haven’t seen any major selling by PSUs (state-owned banks) so far today,” he said.
Dealers said market participants were cautious of placing large bets ahead of the release of US CPI data for December, due later today.
At 1304 IST, the dollar index, which measures the strength of the greenback against a basket of six major currencies, was at 102.21 compared with 102.35 on Wednesday. It was 102.50 on Tuesday.
The CPI data release is the next likely major event to determine the dollar’s direction, dealers said. The headline inflation is expected to rise 0.2% on the month and 3.2% on an annual basis, according to a Reuters poll.
The Indian unit erased some gains and fell below the 83 level as some banks bought the greenback for oil marketing companies, dealers said. Oil marketing companies bought the greenback noting relatively lower dollar/rupee levels and crude oil prices, they said.
Oil prices fell by over a dollar a barrel on Wednesday, which may support the Indian unit, dealers said. A fall in oil prices reduces India’s import bill, which supports the currency.
Data released by the Energy Information Administration showed that crude inventories in the world’s largest economy rose by 1.3 mln bbl, to 432.4 mln bbl in the week ended Friday. A Reuters poll showed the respondents expecting a 700,000-bbl drop in the inventories, thereby catching the market by surprise, the report said.
Gasoline stocks also rose by 8 mln bbl, while distillate stocks jumped by 6.5 mln bbl, data from the Energy Information Administration showed.
At 1304 IST, the March contract for Brent crude oil on the Intercontinental Exchange was at $77.42 a bbl compared with $76.80 a bbl on Wednesday, and Tuesday’s close of $77.59 a bbl.
Absence of intervention from the Reserve Bank of India through dollar purchases also supported the Indian unit, dealers said.
For the rest of the day, the rupee is seen in a range of 82.90-83.30 against the dollar, with dealers pegging key technical resistance for the rupee at 82.90 a dollar. (Kabir Sharma)
India Rupee:Steady on caution ahead of US Dec CPI; fall in crude aids
MUMBAI – The rupee was steady against the dollar as market participants were wary of placing large bets ahead of the release of US CPI data for December, dealers said.
“US inflation figures are expected to gather all the looks today,” said Kunal Sodhani, vice-president, treasury at Shinhan Bank.
The dollar index eased ahead of the release of the crucial data, which supported the rupee, dealers said. The data is likely to lend direction to the dollar. It is expected to show that headline inflation rose 0.2% on month and 3.2% on an annual basis in December, according to a Reuters poll.
At 0914 IST, the dollar index, which measures the strength of the greenback against a basket of six major currencies, was at 102.23 compared with 102.35 on Wednesday and 102.50 on Tuesday.
At an event in New York hosted by RM Friedland and Webster Bank, New York Federal Reserve President John Williams said financial markets remain highly reactive to new data. Williams also said that the Fed was in a good place, and that it was time to think about what’s next for interest rates.
Oil prices fell by over $1 a barrel on Wednesday, which also supported the Indian unit, dealers said. A fall in oil prices reduces India’s import bill, which supports the currency.
Data released by the Energy Information Administration showed that crude oil inventories in the US rose by 1.3 mln barrels to 432.4 mln barrels in the week ended Friday. In a poll by Reuters, respondents had said they expected a 700,000-bbl in inventories, the report said.
Gasoline stocks rose by 8 mln bbl, while distillate stocks were up by 6.5 mln bbl, data from the Energy Information Administration showed.
At 0914 IST, the March contract for Brent crude oil on the Intercontinental Exchange was at $77.03 a bbl, compared with $76.80 a bbl on Wednesday, and Tuesday’s close of $77.59 a bbl.
Dealers speculated that the Reserve Bank of India may intervene in the foreign exchange market to buy dollars and limit appreciation in the Indian unit.
For the rest of the day, the rupee is seen in a range of 82.90-83.30 against the dollar, with dealers pegging key technical resistance for the rupee at 83.00 a dollar. (Kabir Sharma)
India Rupee: Expected range for rupee – Jan 11
MUMBAI – Following are the expected support and resistance levels for the rupee today, as forecast by leading banks and brokerages in an Informist poll:
(Kabir Sharma)
India Rupee – Asia FX: Most units up as dlr eases before US CPI data
MUMBAI – Most Asian currencies were up against the dollar as the greenback eased ahead of the release of US inflation data for December, due later today.
The CPI is the next likely major event for the dollar’s direction. It is expected to show that headline inflation rose 0.2% on the month and by 3.2% on an annual basis, according to a Reuters poll.
At 0836 IST, the dollar index, which measures the strength of the greenback against a basket of six major currencies, was at 102.26 compared with 102.35 on Wednesday. It was 102.50 on Tuesday.
Further, New York Federal Reserve President John Williams, while attending an event in New York hosted by RM Friedland and Webster Bank, said financial markets remain highly reactive to new data. Williams also said that the US Federal Reserve is in a good place, and it’s time to think about what’s next for interest rates.
The South Korean won rose 0.3% against the dollar. The Philippines peso rose 0.2% against the greenback.
The Indonesian rupiah, the Malaysian ringgit, and the Thai baht were all up 0.1% against the dollar. (Kabir Sharma)
End
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Saji George Titus
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