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Tuesday, October 4, 2022

India Rupee Review: At 1-mo high on broad-based weakness in dollar

Informist, Monday, Aug 1, 2022

 

By Pratiksha

 

NEW DELHI – The rupee settled at its highest closing level against the greenback in over a month due to broad-based weakness in the US dollar, dealers said.

 

The Indian unit was also supported by persistent dollar sales on behalf of exporters and foreign portfolio investors, dealers said. 

 

Today, the Indian rupee settled 0.3% higher at 79.0200 a dollar. 

 

The dollar index fell to a three-week low as investors continued to bet that the US Federal Reserve will be less aggressive in hiking policy rates amid a risk of recession for the US economy.

 

The US currency weakened globally after data released on Thursday showed that the US GDP fell at an annualised rate of 0.9% in Apr-Jun.

 

At 1735 IST, the dollar index, which measures the strength of the US currency against a basket of six major currencies, was at 105.63 compared with 105.90 on Friday. It was at 106.35 on Thursday.

 

The Indian currency started the day higher at 79.1800 a dollar due to global weakness in the US currency. However, two hours into trade, it moved to the day’s low of 79.2175 a dollar as some state-owned banks purchased dollars on behalf of oil marketing companies, dealers said. However, the dollar purchases were less in quantum, they added. 

 

Prices of Brent crude oil fell today as investors braced for this week’s meeting of the Organization of the Petroleum Exporting Countries and its allies on supply adjustments.

 

At 1735 IST, the October contract of Brent crude oil on the Intercontinental Exchange was at $102.26 a barrel as against the previous close of $103.97 a bbl. 

 

However, as some foreign banks stepped in to sell dollars on behalf of exporters, the rupee jumped to the 79.10-a-dollar level, dealers said.

 

According to dealers, the risk appetite among investors has improved, so exporters sold at around these levels on expectations that the Indian currency may not depreciate sharply further or touch the psychologically-crucial level of 80 a dollar in the near term.

 

“Exporters are finding these levels lucrative since the rupee is seen appreciating in the near term,” a dealer with a state-owned bank said. “The worst seems to be over for the rupee now, so exporters are bound to book at these levels.”

 

Dealers said a surge in domestic equity indices also prompted banks to sell dollars, likely for foreign fund inflows, which also supported the local currency. 

 

The Nifty 50 and Sensex ended 1.1% and 1.0% higher, respectively.

 

As exporters stepped up their dollar sales, the rupee ascended to the day’s high of 79.00 a dollar and closed at 79.0200 a dollar. However, it didn’t breach the crucial technical resistance of 79.00 a dollar. 

 

 

 

AT 1530 IST

AT 0900 IST

HIGH

LOW

PREVIOUS

(AT 1530 IST)

Spot rupee per $1

79.020079.180079.000079.217579.2500

 

FORWARDS

Premiums on dollar/rupee one-year forward contracts ended marginally higher today as gains in the rupee prompted banks and importers to buy dollars for forward delivery, dealers said.

 

The premium on the one-year dollar/rupee contract was at 255.98 paise as against 254.18 paise at Friday’s close. On an annualised basis, the premium was at 3.24% as against the previous close of 3.21%.

 

Given that the rupee’s value is a component in the calculation of the premium at which exporters may exchange their dollar earnings at a later date, it becomes lucrative to lock in contracts at current levels after a sharp rise in local currency in the spot market.

 

However, dollar/rupee one-year forward premiums eased due to strong technical resistance at 3.25%, dealers said.

 

Participants said the outcome of the Monetary Policy Committee’s meeting on Friday would be the next crucial event for the market.

 

OUTLOOK

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

 

“Broadly, some easing move in rupee could be expected towards 79 and 78.70 levels before again heading towards 80 over the medium term,” a brokerage firm said in a note.

 

According to dealers, dollar sales by exporters are likely to aid the Indian currency. 

 

Dealers have pegged immediate key technical resistance for the rupee at 79.00 a dollar, a break from which can push the rupee to 78.80 a dollar.

 

During the day, the rupee is seen at 78.80-79.30 a dollar.

India Rupee: Premiums rise as importers buy fwd dlrs on rupee’s rise

 

 

AT 1505 IST

AT 0900 IST

HIGH

LOW

PREVIOUS

(AT 1530 IST)

Spot rupee per $1

79.107579.180079.082579.217579.25001-year dlr/rupee fwd (paise)255.98253.98258.03 253.98254.18

 

MUMBAI – Premiums on dollar/rupee one-year forward contracts rose marginally today as gains in the rupee prompted banks and importers to buy dollars for forward delivery, dealers said.

 

The premium on the one-year dollar/rupee contract was at 255.98 paise as against 254.18 paise at Friday’s close. On an annualised basis, the premium was at 3.24% as against the previous close of 3.21%.

 

Given that the rupee’s value is a component in the calculation of premium at which exporters may exchange their dollar earnings at a later date, it becomes lucrative to lock in contracts at current levels after sharp rise in local currency in spot market.

 

However, dollar/rupee one-year forwards premiums eased due to strong technical resistance at 3.25%, dealers said.

 

“A strong trigger required to breach the 3.25% mark convincingly,” said a dealer with big state-owned bank.

 

Participants said the outcome of Monetary Policy Committee’s meeting on Friday would be the next crucial event for the market. (Richard Fargose)

India Rupee: Remains up as banks persistently sell dlrs for exporters

 

 

AT 1329 IST

AT 0900 IST

HIGH

LOW

PREVIOUS

(AT 1530 IST)

Spot rupee per $1

79.107579.180079.082579.217579.2500

 

NEW DELHI – The rupee remained up against the greenback as foreign banks persistently sold dollars on behalf of exporters, dealers said. 

 

Dealers said as risk sentiment among investors has improved, exporters sold at around these levels on expectation that the Indian currency may not depreciate sharply further or touch the psychologically-crucial level of 80 a dollar in the near term.

 

However, some banks purchased dollars on behalf of oil marketing companies, which weighed on the Indian unit, dealers said. 

 

Dealers have pegged immediate technical resistance for the rupee at 79.00 a dollar.

 

For the rest of the day, the Indian unit is seen at 78.8000-79.3000 a dollar.  (Pratiksha)

India Rupee: Rises as dollar index at 3-week low, domestic shares up

 

 

AT 0930 IST

AT 0900 IST

HIGH

LOW

PREVIOUS

(AT 1530 IST)

Spot rupee per $1

79.115079.180079.100079.190079.2500

 

NEW DELHI – The rupee rose against the greenback today because the dollar index stayed near a three-week low.

 

The index fell as investors continued to bet that the US Federal Reserve will be less aggressive in hiking policy rates amid a risk of recession for the US economy.

 

At 0931 IST, the dollar index, which measures the strength of the US currency against a basket of six major currencies, was at 105.77 compared with 105.90 on Friday. It was at 106.35 on Thursday.

 

The gains in domestic equity indices also supported the rupee, according to dealers. At 0931 IST, the Nifty 50 and the Sensex rose 0.4% and 0.3%, respectively.

 

“The overall market sentiment is selling (of dollars) on uptick,” a dealer with a state-owned bank said. “Exporters will aggressively book around these levels as the appreciation trend is going to sustain for a while.”

 

Dealers have pegged immediate technical resistance for the rupee at 79.00 a dollar, a break from which can push the rupee to 78.80 a dollar.

 

For the rest of the day, the Indian unit is seen at 78.8000-79.3000 a dollar.  (Pratiksha)

India Rupee – Asia FX: Most units down as weak China PMI data weighs

 

MUMBAI – Most Asian currencies were down after local equity shares fell as weak economic data from China weighed on investor sentiment.

 

Data released on Sunday showed China’s official gauge of factory activity fell to 49.0 in July, compared with median estimate of 50.3 from a Wall Street Journal survey.

 

However, Asian units were supported as the dollar index hovered near a three-week low.

 

At 0915 IST, the dollar index, which measures the strength of the US currency against a basket of six major currencies, was at 105.67 compared with 105.90 on Friday. It was at 106.35 on Thursday.

 

The index fell as investors continued to bet that the US Federal Reserve will be less aggressive about hiking policy rates amid a risk of recession for the US economy.  (Richard Fargose)

India Rupee: Expected range for rupee – Aug 1

 

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

State-owned bank79.4078.90State-owned bank79.3578.80Foreign bank79.4078.80Brokerage firm79.5078.90Brokerage firm79.5079.00Brokerage firm79.3078.90

(Pratiksha)

End

 

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

 

Edited by Namrata Rao

 

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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