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Thursday, September 29, 2022

India Rupee Review: Rises on broad-based weakness in dlr, FX inflows

Informist, Wednesday, Aug 10, 2022

 

By Pratiksha

 

NEW DELHI – Even though state-owned banks persistently purchased the greenback on behalf of oil marketing companies, the rupee rose against the dollar today due to broad-based weakness in the US unit, dealers said. 

 

The Indian unit was also supported by continuous dollar sales for foreign fund inflows, dealers added. 

 

After moving in a range of 20 paise through the day, the rupee settled 0.2% higher at 79.5200 a dollar today, as against 79.6600 a dollar on Monday. Domestic financial markets were closed Tuesday on account of Muharram.

 

The Indian unit opened 10 paise higher at 79.5600 a dollar because the greenback fell globally on caution ahead of the US CPI print for July, scheduled for release later in the day, dealers said. 

 

Market participants await the US inflation print for cues on the pace of rate hikes by the US Federal Reserve and to assess the greenback’s strength against its peers, going forward.

 

The US CPI annual inflation print is expected to ease to 8.8% in July from a fresh four-decade high of 9.1% in June.

 

At 1626 IST, the dollar index, which measures the strength in the US currency against a basket of six major currencies, was at 106.10 compared with 106.37 on Tuesday. It was at 106.44 on Monday.

 

Two hours into the trade, the domestic unit ascended to the day’s high of 79.4075 a dollar as some foreign banks, including a US-based bank, sold dollars for overseas investment into Syrma SGS Technology Ltd’s upcoming initial public offering, dealers said.

 

The electronic systems and solutions provider’s offer will open for subscription on Friday and close on Aug 18.

 

Dealers said a part of these foreign fund inflows were on account of the completion of Housing Development Finance Corp’s $1.1-bln syndicated social loan facility for the financing of affordable housing in India. 

 

However, some state-owned banks purchased dollars on behalf of oil marketing companies, which capped gains in the Indian unit, dealers said. 

 

Prices of crude oil fell today after industry data showed US crude stockpiles grew more than expected in the past week.

 

Data from the American Petroleum Institute showed that US crude stocks rose by about 2.2 mln barrels for the week ended Aug 5, compared with a forecast of less than 100,000 bbl.

 

At 1626 IST, the October contract of Brent crude oil on the Intercontinental Exchange was at $95.11 a barrel against the previous close of $96.31 a bbl. Prices were at $96.65 a bbl on Monday. 

 

The rupee traded in a narrow range of 79.45-79.50 a dollar for majority of the trading session. Dealers said volumes in the currency market were lower than usual as cautious traders refrained from placing fresh bets ahead of the release of the US CPI inflation data. 

 

“The US CPI data is the event in focus currently, so traders avoided long bets,” a dealer with a private bank said. “Also there is a long weekend ahead, so volumes are expected to remain dull for the next few sessions.”

 

 

AT 1530 IST

AT 0900 IST

HIGH

LOW

PREVIOUS

(AT 1530 IST)

Spot rupee per $1

79.520079.560079.407579.605079.6600

 

FORWARDS

Premiums on dollar/rupee one-year forward contract ended steady today ahead of the US July CPI data, due for release later today.

 

The premium on the one-year dollar/rupee contract was at 239.92 paise as against 239.60 paise at close on Monday. On an annualised basis, the premium was unchanged against the previous close of 3.01%.

 

The US inflation print will provide further cues on the pace of rate hikes by the US Federal Reserve and the greenback’s strength against its peers going forward, market participants said.

 

The US CPI annual inflation print is expected to ease to 8.8% in July from a four-decade high of 9.1% in June.

 

Traders also await India CPI print for July, due Friday, for cues on the trajectory of inflation, after the Reserve Bank of India retained its projection for retail inflation to average 6.7% in 2022-23 (Apr-Mar), dealers said.

 

OUTLOOK

On Thursday, the rupee will take cues from overnight movement in the dollar index after the release of the US consumer price data later today, dealers said. 

 

The local unit will also take cues from movement in the Brent crude oil prices, dealers said.

 

“Over the near term, we expect USDINR to remain rangebound between 79.00 and 80.00 levels on spot,” said Anindya Banerjee, vice president, currency derivatives and interest rate derivatives at Kotak Securities Ltd.

 

Foreign and private banks are expected to sell dollars for investment by overseas funds into the public offer of Syrma SGS Technology Ltd, dealers said.

 

During the day, the rupee is seen at 79.30-79.80 a dollar.

 

 India Rupee: Premiums steady as market awaits US Jul CPI data

 

 AT 1420 ISTAT 0900 ISTHIGHLOWPREVIOUS(AT 1530 IST)Spot rupee per $179.487579.560079.415079.605079.66001-year dlr/rupee fwd (paise)239.53239.53241.03239.03239.60

 

MUMBAI – Premiums on dollar/rupee one-year forward contract were steady today ahead of the US July CPI data, due later today.

 

The premium on the one-year dollar/rupee contract was at 239.53 paise as against 239.60 paise at close on Monday. On an annualised basis, the premium was at 3.00% against the previous close of 3.01%.

 

The US inflation print will provide further cues on the pace of rate hikes by the US Federal Reserve and the greenback’s strength against its peers going forward, market participants said.

 

The US CPI annual inflation print is expected to ease to 8.8% in July from a four-decade high of 9.1% in June.

 

Traders also await India CPI print for July, due Friday, for cues on the trajectory of inflation, after the Reserve Bank of India retained its projection for retail inflation to average 6.7% in 2022-23 (Apr-Mar), dealers said. (Richard Fargose)

India Rupee: Remains up as foreign banks sell dollars for FX inflows

 

 

AT 1340 IST

AT 0900 IST

HIGH

LOW

PREVIOUS

(AT 1530 IST)

Spot rupee per $1

79.470079.560079.415079.605079.6600

 

NEW DELHI – The rupee remained up against the greenback as foreign banks sold dollars for overseas investment into Syrma SGS Technology Ltd’s upcoming initial public offering, dealers said.

 

The IPO will open for subscription on Friday and close on Aug 18.

 

Dealers said a part of these foreign fund inflows were on account of the completion of Housing Development Finance Corp’s $1.1-bln syndicated social loan facility for the financing of affordable housing in India. 

 

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

 

For the rest of the day, the Indian unit is seen at 79.4000-79.8000 a dollar.  (Pratiksha)

India Rupee – Asia FX: Mixed ahead of US CPI; weak equities weigh

 

MUMBAI – Asian currencies were mixed against the dollar ahead of the US July CPI data, due later today.

 

Investors were cautious ahead of the data release. The US CPI annual inflation print is expected to ease to 8.8% in July from a four-decade high of 9.1% in June.

 

Despite easing to some extent, inflation is expected to remain sharply above the US Federal Reserve’s target of 2%, requiring sharp rate hikes as the latest jobs data suggested the world’s largest economy is not in a recession.

 

A slight fall in the dollar index supported Asian currencies, while weak local equities weighed.

 

At 0950 IST, the dollar index, which measures strength in the US currency against a basket of six major currencies, was at 106.27 compared with 106.37 on Tuesday. It was at 106.44 on Monday.  (Richard Fargose)

India Rupee: Rises as dlr index falls on caution before US CPI print

 

 

AT 0928 IST

AT 0900 IST

HIGH

LOW

PREVIOUS

(AT 1530 IST)

Spot rupee per $1

79.532579.560079.512579.605079.6600

 

NEW DELHI – The rupee rose against the greenback today as the US dollar index fell on caution ahead of the US CPI print for July, scheduled later today, dealers said. 

 

Market participants await the inflation print for cues on the pace of rate hikes by the US Federal Reserve and the US unit’s strength against its peers going forward.

 

The US CPI annual inflation print is expected to ease to 8.8% in July from a fresh four-decade high of 9.1% in June.

 

At 0928 IST, the dollar index, which measures strength in the US currency against a basket of six major currencies, was at 106.27 compared with 106.37 on Tuesday. It was at 106.44 on Monday.

 

Gains in domestic equity indices also supported the sentiment for the Indian unit, according to dealers. At 0928 IST, both the Nifty 50 and Sensex were up 0.1%.

 

“The rupee should move in a narrow range of 79.40-79.60 (a dollar) today as there is caution ahead of the US CPI data,” a dealer with a state-owned bank said. “It (rupee) should find a proper direction after the release of the data.”

 

For the rest of the day, the Indian unit is seen at 79.4000-79.8000 a dollar.  (Pratiksha)

 

India Rupee: Expected range for rupee – Aug 10

 

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 bank79.7579.35State-owned bank79.7079.40Foreign bank79.8579.40Private bank79.7079.40Brokerage firm79.7079.30Brokerage firm79.7579.35Brokerage firm79.7579.30

 

(Pratiksha)

 

End

 

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

 

Edited by Tanima Banerjee

 

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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