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India Rupee Review:At record low as FIIs, oil marketing cos buy dlrs

Informist, Monday, Jul 11, 2022

 

By Pratiksha and Srijonee Bhattacharjee

 

NEW DELHI – Even though the Reserve Bank of India supported the rupee through its sales of the greenback, the rupee ended at a record low against the dollar today due to continuous purchases of the US currency by foreign institutional investors and oil marketing companies, dealers said. 

 

Today, the rupee closed 0.2% lower at a record low of 79.4375 a dollar.

 

The Indian unit opened flat at 79.2500 a dollar, but breached the technical support of 79.30 a dollar shortly afterwards as foreign banks persistently purchased dollars on behalf of foreign institutional investors, dealers said. 

 

Dealers speculated that the Reserve Bank of India sold dollars in the offshore market to prevent the rupee from pressure at the beginning of onshore trade as global cues flashed adversely. 

 

The Indian unit was weighed by strength in the US dollar index, which rose as concerns about global economic growth amid rising global inflation supported the safe haven greenback. 

 

The dollar index, which measures the strength in the US currency against a basket of six major currencies, rose to 107.79 on Friday, its highest level since October 2002. 

 

At 1650 IST, the dollar index, was at 107.61 compared with 106.90 on Friday. It was at 107.13 on Thursday.

 

Dealers said losses in the Indian currency were restricted as some banks sold dollars near the 79.38-79.40-a-dollar level, likely on behalf of the central bank.

 

However, the rupee was gradually dragged below the 79.40 a dollar level as foreign institutional investors stepped up their dollar purchases, dealers said. 

 

Moreover, state-owned banks purchased the greenback on behalf of oil marketing companies, which also weighed on the domestic unit, dealers said. 

 

Oil prices fell today as markets braced for a likely hit to demand from mass COVID testing in China, a worry that outweighed ongoing concerns about tight supply.

 

At 1650 IST, the September contract of Brent crude oil on the Intercontinental Exchange was at $105.39 a barrel against the previous close of $107.02 a bbl. It was at $104.65 a bbl on Thursday.

The rupee traded in a narrow range of 79.39-79.42 a dollar for a duration of almost four hours but as the central bank stepped up its dollar sales around the 79.41 a dollar level during the final 30 minutes of trade, the rupee recouped almost 7 paise of its losses.

 

However, as dollar purchases by oil marketing companies continued, the domestic unit closed at an all-time low of 79.4375 a dollar, dealers said.

 

“There was considerable demand (of dollars) in the market. Also, since the 79.30 support level was breached today, we saw a sharp (downward) movement around that level,” a dealer with a private bank said. “The RBI initially tried to prevent the earlier record low (of 79.3800 a dollar). Some exporters also came around the 79.40 level.”

 

 

AT 1530 IST

AT 0900 IST

HIGH

LOW

PREVIOUS

(AT 1530 IST)

Spot rupee per $1

79.437579.250079.240079.437579.2500

 

FORWARDS

Premiums on dollar/rupee forward contracts fell slightly ahead of the release of the consumer price based inflation after market hours on Tuesday, dealers said. 

 

Premium on the one-year contract was at 237.73 paise as against 239.80 paise on Friday. On an annualised basis, the premium was at 2.99% as against 3.02% at previous close.

 

The consumer-price based inflation is seen at 7.00% in June, nearly unchanged from 7.04% in the previous month. 

 

However, traders refrained from placing very heavy bets on caution. 

 

OUTLOOK

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

 

Traders are likely to stay cautious ahead of the release of the US consumer price data due Wednesday, dealers said. 

 

“The US CPI has been mostly priced in by the market. The market is expecting a 75 bps hike in the upcoming Fed meet,” a dealer with a state-owned bank said. “However, traders will remain cautious till Wednesday.”

 

Dealers are of the view that the RBI will continue to intervene through dollar sales to protect the rupee from depreciating sharply against the dollar.

 

Dealers have pegged immediate key technical support for the rupee at 79.50 a dollar, a break of which can push the rupee to 80 a dollar.

 

During the day, the rupee is seen in the range of 79.10-79.60 a dollar.

India Rupee – World FX:Dlr index near 20-year high; US CPI data eyed

 

 AT 1515 ISTHIGHLOWPREVIOUSGBP/USD 1.19441.20371.19401.2032EUR/USD 1.01071.01831.01061.0183NZD/USD 0.61500.61920.61510.6182AUD/USD 0.67920.68570.67930.6815USD/JPY 137.0100137.2770136.0000136.0600USD/CAD 1.30031.30031.29431.2945EUR/JPY 138.4840139.1720138.2490138.6449CHF/USD 1.01861.02421.01831.0239EUR/CHF 0.99220.99480.99000.9946

 

MUMBAI – The US dollar gained against most major currencies ahead of the US inflation report later this week, which could force another big hike in interest rates.

 

Global growth fears also lifted the demand for the safe-haven US currency.

 

The dollar index, which measures the strength of the US currency against a basket of six major currencies, rose to a fresh near two-decade high.  At 1515 IST, the index was at 107.58 compared with 106.90 on Friday.

 

The euro slipped 0.7% against the US dollar today, the biggest single pipeline carrying Russian gas to Germany entered annual maintenance, with flows expected to stop for 10 days.

 

Investors are worried the gas pipeline shutdown might be extended due to the war in Ukraine, which could rapidly push the eurozone economy into recession.

 

The Japanese yen also slipped 0.8% today after Japan’s ruling conservative coalition’s registered strong performance in election. The mandate for the ruling conservative coalition indicates no change to loose monetary policies, which is weighing on the yen. (Richard Fargose)

India Rupee – Asia FX: Mixed on caution before US inflation data Wed

 

MUMBAI – Asian currencies were mixed against the US dollar as investors remained cautious ahead of the US inflation report later this week, which could force another big hike in interest rates.

 

Globally, investors have been increasingly concerned that aggressive rate hikes by the US central bank to curb inflation may push the economy into a recession. US jobs figures on Friday showed that a slowdown is not imminent, at least in the near term.

 

US consumer price data due on Wednesday is also likely to show that inflation pressures remain elevated, with economists expecting an annual increase of 8.7% in June.

 

The Taiwanese dollar and the Chinese yuan were down 0.1-0.2%, while the Philippines peso and the Indonesian rupiah rose 0.1% against the dollar. (Richard Fargose)

India Rupee: At record low as FIIs buy dlr; RBI dlr sales limit fall

 

 

AT 1050 IST

AT 0900 IST

HIGH

LOW

PREVIOUS

(AT 1530 IST)

Spot rupee per $1

79.382579.250079.240079.405079.2500

 

NEW DELHI – The rupee fell to a record low against the greenback as banks purchased dollars on behalf of foreign institutional investors, dealers said. 

 

Today, the Indian currency fell to an all-time low of 79.4050 a dollar. 

 

However, dealers said the losses were restricted as some banks stepped in to sell the greenback on behalf of the Reserve Bank of India at around the 79.38- to 79.40-a-dollar level.

 

Dealers have now pegged the immediate technical support for the rupee at 79.50 a dollar.

 

For the rest of the day, the Indian unit is seen at 79.2000-79.5000 a dollar.  (Pratiksha)

 

India Rupee: Falls as dollar index strengthens, domestic shares down

 

 

AT 0930 IST

AT 0900 IST

HIGH

LOW

PREVIOUS

(AT 1530 IST)

Spot rupee per $1

79.330079.250079.240079.340079.2500

 

NEW DELHI – The rupee fell against the greenback today because the dollar index strengthened as concerns over global economic growth amid rising inflation boosted the safe-haven appeal of the US unit, dealers said. 

 

At 0930 IST, the dollar index, which measures the strength in the US currency against a basket of six major currencies, was at 107.36 compared with 106.90 on Friday. It was at 107.13 on Thursday.

 

Domestic and Asian share indices fell today as investors remained risk averse ahead of the key consumer inflation data in the US for June. This also weighed on the Indian unit, dealers said. 

 

At 0930 IST, both the Nifty 50 and the Sensex were down 0.5% each.

 

“I think the record low level (79.38 a dollar) will be watched closely, if it is tested, we might see a movement towards the 79.50 (a dollar) level,” a dealer with a state-owned bank said. 

 

Investors now await the US consumer price data, due Wednesday, which is likely to show that inflation pressure remains elevated. Economists expect June headline inflation in the US to rise 8.7% year-on-year versus 8.6% in May, cementing bets on another hefty rate hike by the Federal Reserve.

 

Dealers have pegged immediate technical support for the rupee at 79.50 a dollar.

 

For the rest of the day, the Indian unit is seen at 79.1000-79.5000 a dollar.  (Pratiksha)

India Rupee: Expected range for rupee – Jul 11

 

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 bank79.5079.10Big state-owned bank79.5079.15Foreign bank79.6079.05Brokerage firm79.4279.20Brokerage firm79.5579.20

(Pratiksha and Richard Fargose)

 

End

 

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

 

Edited by Vidhi Verma

 

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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