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Wednesday, December 7, 2022

India Rupee Review: Reverses losses on FPI dlr sales, weak dlr index

Informist, Monday, Sep 12, 2022

 

By Pratiksha

 

NEW DELHI – The rupee pared losses and closed higher against the dollar for the third consecutive session today because of continuous dollar sales by foreign portfolio investors and weakness in the dollar index, dealers said.

 

The rupee settled at 79.5225 a dollar, recovering from a low of 79.7150 during the day and against 79.5800 a dollar on Friday. The unit moved in the range of 26 paise through the day.

 

The Indian unit opened lower at 79.6275 a dollar as Brent crude oil prices surged 4% on Friday because of fear of supply cuts, dealers said.

 

Russian President Vladimir Putin has threatened to halt oil and gas exports to Europe if price caps are imposed.

 

A rise in crude oil prices increases India’s import bill, which subsequently weighs on the Indian currency.

 

At 1630 IST, the November contract of Brent crude oil on the Intercontinental Exchange was at $93.89 a barrel as against $92.84 a bbl on Friday. On Thursday, the November contract had settled at $89.15 a bbl.

 

An hour into trade, the domestic unit fell further to the day’s low of 79.7150 a dollar as some state-owned banks purchased dollars on behalf of oil marketing companies, dealers said.

 

However, as foreign banks sold the greenback on behalf of foreign portfolio investors looking to invest in domestic equities, the local unit erased all earlier losses and gradually rose to the day’s high of 79.4600 a dollar, dealers said.

 

The Nifty 50 and Sensex ended 0.6% and 0.5% higher, respectively.

 

Moreover, the dollar index weakened further in European trade, ahead of US CPI inflation data due on Tuesday. This further supported the Indian currency, dealers said.

 

US CPI data, due on Tuesday, is expected to show inflation in the country cooled to 8% in August, down from 8.5% in July. A sharp fall in CPI inflation may temper expectations of a rate hike by the Federal Reserve to 50 basis points, against current expectations of a 75-bps hike, but the impact may be weak, as Fed officials have continuously hinted at a 75-bps hike in September.

 

At 1630 IST, the dollar index, which measures the strength of the greenback against a basket of six major currencies, was at 108.21 compared with 109.00 on Friday. It was at 109.71 on Thursday.

 

“The rupee was supported by considerable FII inflows today and weakness in dollar,” a dealer with a state-owned bank said. “However, there was some caution ahead of the US CPI data tomorrow.”

 

 

AT 1530

IST

AT 0900 ISTHIGHLOW

PREVIOUS

(AT 1530 IST)

Spot rupee per $179.522579.627579.460079.715079.5800

 

FORWARDS

Premiums on dollar/rupee forward contracts ended slightly lower today as banks sold the greenback for forward delivery on the view that difference between Indian and US yields may narrow, dealers said.

 

Premium on the one-year, exact-period dollar/rupee forward contract was at 229.97 paise, as against 230.86 paise at close on Friday. On an annualised basis, the premium was at 2.89% against the previous close of 2.90%.

 

Dealers said the Reserve Bank of India’s Monetary Policy Committee is likely to hike rates by 35-50 basis points at its upcoming policy review, while the US Federal Reserve Open Market committee is widely seen hiking rates by 75 bps.

 

Premiums on forwards of a currency pair are reflective of the interest rate differential between the two countries.

 

OUTLOOK

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

 

“Rupee may move cautiously tomorrow as well,” a dealer with a private bank said. “If good inflows hit the market, we might see the rupee moving towards the crucial resistance of 79.30 (a dollar).”

 

Investors may remain cautious and avoid fresh bets ahead of US CPI inflation data Tuesday.

 

They see technical resistance for the rupee at 79.30 a dollar and long-term technical support at 80.00 a dollar.

 

During the day, the rupee is seen in a range of 79.40-79.80 a dollar.

India Rupee: Premiums tad down as US-India rate gap seen narrowing

 

 AT 1500 ISTAT 0900 ISTHIGHLOWPREVIOUS(AT 1530 IST)Spot rupee per $179.515079.627579.460079.715079.58001-year dlr/rupee fwd (paise)229.97230.58230.58228.35

230.86

 

MUMBAI – Premiums on dollar/rupee forward contracts fell slightly as banks sold the greenback for forward delivery on the view that the differential between Indian and US yields may narrow, dealers said.

 

The premium on the one-year, exact-period dollar/rupee forward contract was at 229.97 paise, as against 230.86 paise at close on Friday. On an annualised basis, the premium was at 2.89% as against 2.90% at the previous close.

 

“Forward premiums are gradually getting aligned to narrowing (US-India) interest rate gap,” said a dealer with big state-owned bank.

 

Dealers said the Reserve Bank of India’s Monetary Policy Committee is likely to hike rates by 35-50 basis points at its upcoming policy review, while the US Federal Reserve Open Market committee is widely seen hiking rates by 75 bps.

 

Premiums on forwards of a currency pair are reflective of the interest rate differential between the two countries. A slower-than-expected rise in India’s interest rates compared to US Fed policy rates would ensure that the spread rates narrow further. (Richard Fargose)

India Rupee: Pares losses on FPIs’ dlr sales, weakness in dlr index

 

 

AT 1325

IST

AT 0900 ISTHIGHLOW

PREVIOUS

(AT 1530 IST)

Spot rupee per $179.562579.627579.530079.715079.5800

 

NEW DELHI – The rupee pared earlier losses against the greenback as banks sold dollars on behalf of foreign portfolio investors, dealers said. 

 

Gains in domestic equity indices prompted banks to sell dollars on behalf of foreign portfolio investors, dealers said. At 1325 IST, the Nifty 50 and the Sensex were 0.6% and 0.7% higher, respectively.

 

Moreover, the dollar index weakened further in European trade, ahead of US CPI inflation data due on Tuesday. This further supported the Indian currency, dealers said. 

 

At 1325 IST, the dollar index, which measures the strength of the greenback against a basket of six major currencies, was at 107.86 compared with 109.00 on Friday. It was at 109.71 on Thursday.

 

Earlier today, the Indian unit fell to the day’s low of 79.7150 a dollar as some state-owned banks purchased dollars on behalf of oil marketing companies, dealers said.

 

Dealers have pegged immediate technical resistance for the rupee at 79.40 a dollar. 

 

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

 

India Rupee – Asia FX: Most down on caution ahead of US CPI data

 

MUMBAI – Most Asian currencies fell against the greenback today as investors remained cautious ahead of US CPI inflation data.

 

The US CPI report on Tuesday will provide signs of further deceleration in inflationary pressures.

 

Although most analysts expect headline inflation in the US to ease to 8% in August from 8.5% in July, recent comments from Fed officials hinted at a hike of 75 basis points in September.

 

Fed Governor Christopher Waller said on Friday that the US central bank should be aggressive with rate hikes and that he supports another sharp rate hike this month. The comments came a day after Fed Chair Jerome Powell reiterated his commitment to aggressive rate hikes, firming up bets of a 75-bps hike at the next rate review during Sep 20-21.

 

The South Korean won and the Philippine peso fell 0.4%, the most amongst their Asian peers. While other currencies fell 0.1-0.2% against the dollar.

 

Markets in Hong Kong and China are closed today for Mid-Autumn festival. (Richard Fargose)

India Rupee: Falls as crude oil prices surge Fri; US CPI data eyed

 

 

AT 0930

IST

AT 0900 ISTHIGHLOW

PREVIOUS

(AT 1530 IST)

Spot rupee per $179.647579.627579.627579.670079.5800

 

NEW DELHI – The rupee fell against the greenback today as Brent crude oil prices surged 4% on Friday because of fear of supply cuts, dealers said. 

 

Russian President Vladimir Putin has threatened to halt oil and gas exports to Europe if price caps are imposed.

 

A rise in crude oil prices increases India’s import bill, which subsequently weighs on the Indian currency.

 

At 0930 IST, the November contract of Brent crude oil on the Intercontinental Exchange was at $91.57 a barrel as against $92.84 a bbl on Friday. On Thursday, the November contract had settled at $89.15 a bbl.

 

However, gain in domestic share indices in early trade restricted losses for the Indian unit, dealers said. At 0930 IST, the Nifty 50 and the Sensex were 0.5% and 0.4% higher, respectively.

 

Investors will remain cautious and avoid fresh bets ahead of US CPI inflation data scheduled to be released Tuesday and India’s inflation print for August, due later today, dealers said. 

 

“I think the rupee movement will remain range bound till the US CPI data comes out,” a dealer with a state-owned bank said. “The range should remain within 79.60-79.75 (a dollar).”

 

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

India Rupee: Expected range for rupee – Sep 12

 

MUMBAI – 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 bank79.7579.45State-owned bank79.7079.40Foreign bank79.8079.35Brokerage firm79.8079.60Brokerage firm79.8079.55

(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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