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India Rupee Review: Ends off highs on bks’ dlr buys, weak equities

Informist, Thursday, Jan 20, 2022

 

By Pratiksha and Arushi Jain

 

NEW DELHI – The rupee ended off its highs against the dollar today because some state-owned and private banks purchased the US unit on behalf of oil marketing companies, noting elevated Brent crude oil prices, said dealers.

 

After moving in a range of nearly 23 paise through the day, the Indian rupee closed at 74.5000 a dollar against Wednesday’s close of 74.4250 a dollar. The local unit had earlier risen to the day’s high of 74.2900 a dollar.

 

Brent crude oil prices continued to surge and moved near the $89-per-barrel mark as strong demand and short-term supply disruptions globally continued to support prices close to their highest levels since late 2014.

 

At 1610 IST, the March contract of Brent crude oil on the Intercontinental Exchange was at $88.15 per bbl compared with the previous close of $88.44 per bbl. It was at $87.51 per bbl on Tuesday. 

 

Prices of Brent crude oil touched the day’s high of $88.59 a bbl earlier today.

 

A sharp fall in domestic equity indices also dampened sentiment for the Indian unit, dealers said. The Nifty 50 and the Sensex ended down 1.0% and 1.1%, respectively.

 

The Indian rupee had opened steady at 74.4300 a dollar today as investors stayed cautious ahead of the US Federal Open Market Committee’s two-day policy meeting on Jan 25-26, said dealers. Market participants are expecting cues on the pace at which the US central bank will end its bond purchase programme, as well as on when it might begin reducing the size of its massive balance sheet to curb inflation, said dealers.

 

Investors expect the Fed to hike interest rates in March, for the first time since the start of the COVID-19 pandemic, while already pricing in four rate hikes in 2022, said dealers.

 

The rupee inched higher against the dollar in a short while as some state-owned and foreign banks stepped in to sell the US unit, likely for foreign fund inflows into Indian companies, dealers said.

 

Moreover, the US unit remained weaker against other major currencies after US treasury yields retreated from near two-year highs, which also supported sentiment for the local unit, said dealers.

 

Elevated crude oil prices led traders to turn to commodity-linked currencies such as the Australian and Canadian dollars, which also weighed on the US unit, according to dealers.

 

At 1610 IST, the dollar index, which measures the strength of the US currency against a basket of six major currencies, was at 95.56, against 95.51 on Wednesday. It was at 95.73 on Tuesday.

 

It had fallen to as much as 95.42 earlier today.

 

Meanwhile, domestic investors refrained from placing fresh bets on either side of the rupee today due to lack of significant cues in currency markets, according to dealers.

 

“The market couldn’t find any notable cues, because of which the rupee was directionless and remained largely range-bound throughout the day,” said a dealer with a state-owned bank.

 

 

AT 1530 IST

1000 IST

HIGH

LOW

PREVIOUS

(AT 1530 IST)

Spot rupee per $1

74.500074.430074.290074.527574.4250

 

FORWARDS

The premium on the dollar/rupee forwards contract settled a tad lower due to dollar sales by banks on behalf of exporters, dealers said.

 

On an annualised basis, the premium on the one-year, exact-period dollar/rupee contract was at 4.73%, compared with 4.74% on Wednesday. The premium was at 352.13 paise compared with 354.40 paise on Wednesday.

 

OUTLOOK

On Friday, the rupee may take opening cues from overnight movement in the dollar index and crude oil prices, said dealers.

 

“Ahead of the Fed policy, rupee will be stable for the rest of the week unless any big (foreign fund) flows hit the markets,” said a dealer with a private bank.

 

During the day, the rupee is seen at 74.3000-74.6000 a dollar.

India Rupee – World FX: Euro, sterling rise as dollar index weakens

 

 AT 1455 ISTHIGHLOWPREVIOUSGBP/USD 1.36311.36371.36061.3610EUR/USD 1.13521.13691.13411.1342NZD/USD 0.67730.67910.67560.6778AUD/USD 0.72310.72570.72090.7210USD/JPY 114.2120114.5480114.0250114.3280USD/CAD 1.24931.25161.24841.2512EUR/JPY 129.6560130.0880129.5340129.6630CHF/USD 1.09371.09411.09101.0913EUR/CHF 1.03781.03991.03781.0388

 

MUMBAI – The euro and the pound sterling gained against the dollar because the US currency weakened today after a pause in the recent rally in US Treasury yields. 

 

The yield on the benchmark US Treasury note had surged earlier this week due to investors’ expectations that the US central bank would normalise monetary policy more aggressively to tackle surging inflation.

 

According to the CME Group’s FedWatch tool, interest-rate futures markets indicate investors are now betting on four to five interest rate increases this year, up from three to four on Friday.

 

The dollar also weakened against commodity-linked currencies such as the Canadian and Australian dollars amid a rise in commodity prices and optimism about global economic growth.

 

Today, the Australian dollar and the Canadian dollar rose nearly 0.3% and 0.2% against the US dollar, respectively.

 

At 1455 IST, the dollar index, which measures the strength of the US currency against a basket of six major currencies, was at 95.53 against 95.51 on Wednesday. It was at 95.73 on Tuesday. It had fallen to as much as 95.42 earlier today.

 

Globally, investors now await speeches by US Federal Reserve officials ahead of the central bank’s policy meeting this week, where the bank is expected to provide cues on how quickly it will end its bond purchase programme and hike interest rates. (Arushi Jain)

India Rupee: Off highs amid thin trade as bks buy dollars for oil cos

 

 

AT 1415 IST

1000 IST

HIGH

LOW

PREVIOUS

(AT 1530 IST)

Spot rupee per $1

74.380074.430074.300074.440074.4250

 

MUMBAI – The rupee came off its earlier highs amid dull volumes in intra-day trade today, because some state-owned and private banks purchased the greenback on behalf of oil marketing companies, which had noted elevated Brent crude oil prices, dealers said.

 

“There was some buying (of dollars) for oil importers at the 74.37/$1 level by a large private bank, which pushed the rupee beyond the 74.40/$1 mark,” said a dealer with a state-owned bank.

 

Prices of Brent crude oil remained elevated globally for the fifth consecutive day and traded near the $88-per-barrel mark, amid tight supply conditions due to geopolitical tensions across some parts of the world, said dealers.

 

At 1415 IST, the March contract of Brent crude on the Intercontinental Exchange was at $87.81 per bbl compared with the previous close of $88.44 per bbl.

 

The rupee had risen to as much as 74.3000 a dollar earlier today.

 

Moreover, a slump in domestic equity indices also weighed on sentiment for the local unit, said dealers. At 1415 IST, the Nifty 50 and the Sensex were trading nearly 1.4% lower each. 

 

The rupee is seen in a range of 74.2000-74.6000 a dollar for the rest of the day. (Arushi Jain)

India Rupee: Rises on banks’ dlr sales for FX inflows, weak US unit

 

 

AT 1050 IST

1000 IST

HIGH

LOW

PREVIOUS

(AT 1530 IST)

Spot rupee per $1

74.362574.430074.300074.430074.4250

 

NEW DELHI – The rupee rose against the dollar today because some state-owned and foreign banks sold the greenback, likely for foreign fund inflows into Indian companies, dealers said.

 

“There was selling (of dollars) as soon as the market opened, but it is tough to predict rupee’s direction for the day since there are various factors playing out,” said a dealer with a state-owned bank.

 

Moreover, the US unit remained weaker against other major currencies after the US Treasury yields retreated from their near two-year highs, which further supported sentiment for the local unit, said dealers.

 

At 1050 IST, the dollar index, which measures the strength of the US currency against a basket of six major currencies, was at 95.57, against 95.51 on Wednesday. It was at 95.73 on Tuesday.

 

On the flip side, a sharp fall in domestic equity indices capped any sharp gains in the local unit, said dealers. At 1050 IST, the Nifty 50 and the Sensex were nearly 0.6% and 0.7% lower, respectively.

 

Market participants now await cues on monetary policy tightening by the US Federal Reserve ahead of the two-day policy meeting on Jan 25-26, said dealers.

 

The rupee is seen in a range of 74.2000-74.7000 a dollar during the day. (Pratiksha)

India Rupee – Asia FX:Most units steady ahead of Fed Jan policy meet

 

MUMBAI – Most Asian currencies were largely steady against the dollar as investors worldwide awaited the outcome of the US Federal Open Market Committee’s two-day policy meeting on Jan 25-26.

 

The US central bank is expected to provide clues on how quickly it may speed up the end of its bond purchase program and when is it likely to begin reducing the size of its massive balance sheet to curb inflation.

 

The dollar index, which measures the strength of the US currency against a basket of six major currencies, remained off its earlier highs globally and at 0945 IST, it was at 95.52, against 95.51 on Wednesday. It was at 95.73 on Tuesday.

 

The Indonesian rupiah and the Malaysian ringgit also remained largely steady against the dollar ahead of their policy meeting outcomes due later today, where investors expect central banks to keep their benchmark interest rates unchanged.

 

Meanwhile, the Thai baht strengthened the most among Asian currencies and rose nearly 0.2% against the dollar today.  (Arushi Jain)

 India Rupee: Expected range for rupee – Jan 20

 

NEW DELHI – The following are the expected support and resistance levels for the rupee, as forecasted by leading banks and brokerages in an Informist poll:

 

 

SUPPORT

RESISTANCE

Big state-owned bank74.5574.30State-owned bank74.6074.30Foreign bank74.6574.30Foreign bank74.6574.25Foreign bank74.6074.25Private bank74.6474.27Private bank74.6074.30Private bank74.6074.25Brokerage firm74.5674.26Brokerage firm74.5574.25

(Pratiksha)

 

End

 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Edited by Avishek Dutta

 

Cogencis news is now Informist. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.

 

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Send comments to [email protected]

 

© Informist Media Pvt. Ltd. 2022. All rights reserved.

Source: Cogencis

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