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India Rupee Review: Up; RBI intervention keeps rupee above 79/$1

Informist, Monday, Jul 4, 2022

 

By Pratiksha and Srijonee Bhattacharjee

 

NEW DELHI – Notwithstanding persistent dollar purchases by importers, the rupee ended higher against the greenback today because of likely intervention by the Reserve Bank of India, dealers said.

 

The Indian currency snapped a four-day losing streak to settle at 78.9500 a dollar against Friday’s closing level of 79.0450 a dollar.

 

The rupee had opened the day higher at 78.9400 a dollar against 79.0450 a dollar on Friday, as a fall in crude oil prices, on fears of a global recession, weighed on investor sentiment, dealers said.

 

Crude oil prices were down even though supply remains tight due to lower output by the Organization of the Petroleum Exporting Countries, unrest in Libya, and sanctions on Russia.

 

At 1626 IST, the September contract of Brent crude oil on the Intercontinental Exchange was at $111.59 a barrel against the previous close of $111.63 a bbl.

 

However, shortly after the opening, the rupee breached the 79-per-dollar mark and fell to the day’s low of 79.0550 a dollar, as some banks purchased the US unit on behalf of importers, who wanted to take advantage of the relatively lower dollar/rupee levels, dealers said.

 

The Indian currency then moved in a narrow range of 78.98-79.04 a dollar for almost four hours, after which the rupee rose to the day’s high of 78.8675 a dollar, as some banks stepped in to sell dollars on behalf of RBI, dealers said. 

 

Dealers said the central bank sold dollars around the 78.98 a dollar level, as it wanted to prevent the rupee from depreciating below the 79-per-dollar mark.

 

Dealers said volumes in the currency market were subdued as traders stayed on the sidelines and avoided placing fresh bets due to lack of significant cues, dealers said.

 

Trade was lacklustre also because the US financial market is closed on account of Independence Day.

 

Rise in domestic equities also supported the Indian currency, dealers said. The Nifty 50 and the Sensex ended 0.5% and 0.6% higher, respectively.

 

Dealers said importers persistently purchased the greenback around the 78.86-78.88 a dollar level, due to which the domestic unit pared some gains and closed at 78.9500 a dollar.

 

“Importers found these levels lucrative, because of which we saw the downward move,” a dealer with a state-owned bank said. “Looks like, exporters are looking at the 79.50 (a dollar) level for the near-term and the 80 (a dollar) level for the long term.”

 

 

AT 1530 IST

AT 0900 IST

HIGH

LOW

PREVIOUS

(AT 1530 IST)

Spot rupee per $1

78.950078.940078.8675 79.055079.0450

 

FORWARDS

Premiums on dollar/rupee forwards moved in a narrow range today because US markets were shut, dealers said.

 

Premium on the one-year contract was at 239.85 paise against the previous close of 236.17 paise. On an annualised basis, the contract ended at 3.04% as against 2.99% on Friday.

 

OUTLOOK

On Tuesday, the rupee will take cues from overnight movement in the dollar index and Brent crude oil prices, said dealers.

 

“The market is now positioning itself for the next key events, the US Fed meeting minutes and the US jobs data,” said a dealer with a private bank.

 

Minutes of last month’s Fed meeting will be released on Wednesday and the US employment data is due on Friday.

 

According to dealers, the RBI will continue to intervene through dollar sales to protect the rupee from depreciating sharply against the dollar.

 

Dealers now see strong key technical support for the rupee at 79.30 a dollar, which, if broken, will see the rupee testing the 79.50 a dollar level.

 

During the day, the rupee is seen in the range of 78.80-79.30 a dollar.

India Rupee: Rises as banks sell dollar for RBI, crude prices fall

 

 

AT 1450 IST

AT 0900 IST

HIGH

LOW

PREVIOUS

(AT 1530 IST)

Spot rupee per $1

78.890078.940078.8750 79.055079.0450

 

NEW DELHI – The rupee rose against the dollar as some banks sold the US unit, likely on behalf of the Reserve Bank of India, dealers said. 

 

Dealers said the central bank wanted to prevent the rupee from depreciating below the 79-per-dollar mark. 

 

Meanwhile, prices of crude oil fell today as fears of a global recession weighed on investor sentiment. 

 

This also supported the Indian unit, as a fall in crude oil prices decreases India’s import bill, dealers said. 

 

At 1450 IST, the September contract of Brent crude oil on the Intercontinental Exchange was at $111.05 a barrel against the previous close of $111.63 a bbl. 

 

For the rest of the day, the Indian unit is seen at 78.8000-79.2000 a dollar.  (Pratiksha)

 India Rupee – Asia FX: Most down tracking weak local equities

 

MUMBAI – Most Asian currencies were down against the US dollar today tracking weak local equities amid losses in US index futures, and as concerns around a possible global recession continued to dent investor sentiment.

 

A firm US dollar also weighed on the Asian units. The dollar index remained near a 20-year high as investors sought refuge in the safe-haven asset.

 

Trade volumes and volatility in the currency market remained low as US markets are shut today on account of Independence Day.

 

Most units were down 0.1-0.3%, while the Philippine peso and Chinese yuan gained 0.1-0.2% today.  (Richard Fargose)

India Rupee: Off highs as banks buy dollars for importers, local shares fall

 

 

AT 0948 IST

AT 0900 IST

HIGH

LOW

PREVIOUS

(AT 1530 IST)

Spot rupee per $1

79.037578.940078.9400 79.042579.0450

 

NEW DELHI – The rupee came off its earlier highs and fell below the 79-per-dollar mark against the greenback today as some banks purchased the US unit on behalf of importers, who wanted to take advantage of the relatively lower dollar/rupee levels, dealers said.

 

Losses in domestic equity indices also dampened sentiment for the Indian unit, dealers said. At 0948 IST, the Nifty 50 and the Sensex were down 0.4% and 0.2%, respectively.

 

Today, the rupee opened higher at 78.9400 a dollar because prices of crude oil fell slightly in early trade as fears of a global recession weighed on investor sentiment, dealers said. A fall in crude oil prices decreases India’s import bill, which subsequently supports the sentiment for the rupee

 

At 0948 IST, the September contract of Brent crude oil on the Intercontinental Exchange was at $111.45 a bbl against the previous close of $111.63 a bbl. 

 

“The 79.15-79.20 (a dollar) level is in focus,” a dealer with a state-owned bank said. “But it might not breach today since trade is expected to remain dull as US market is closed.” Financial markets in the US are shut today on account of Independence Day.

 

Dealers have pegged the immediate technical support for the rupee at 79.20 a dollar.

 

For the rest of the day, the Indian unit is seen at 78.8000-79.2000 a dollar.  (Pratiksha)

India Rupee: Expected range for rupee – Jul 4

 

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

 

Participants

SUPPORT

RESISTANCE

Big state-owned bank79.1578.85State-owned bank79.2078.80Foreign bank79.2078.75Private bank79.1578.75Brokerage firm79.1878.68Brokerage firm79.1578.87

 

(Pratiksha and Richard Fargose)

 

End

 

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

 

Edited by Ashish Shirke

 

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

 

Cogencis news is now Informist news. 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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