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India Rupee Review: Off highs; banks buy dlrs for oil cos, importers

Informist, Tuesday, Sep 20, 2022

 

By Pratiksha and Richard Fargose

 

NEW DELHI – The rupee pared most of its gains to close marginally higher against the greenback today due to persistent dollar purchases by oil marketing companies and importers, dealers said.

 

The rupee ended at 79.7500 a dollar, as against 79.7700 a dollar on Monday. Movement in the unit throughout the day was restricted to 20 paise.

 

The Indian currency opened 7 paise higher at 79.70 a dollar tracking a surge in other Asian and domestic equity indices, dealers said. 

 

Today, the Nifty 50 and the Sensex ended 1% higher, each.

 

Moreover, some banks sold dollars on behalf of foreign portfolio investors in Indian equities, after which the rupee jumped to the day’s high of 79.5750 a dollar, dealers said. A large US-based bank was said to have sold dollars in early trade today for custodian flows.

 

“With the FPI flows remaining positive and global talk around India turning quite positive, one could get tempted to build shorts in the pair (dollar/rupee),” said Anindya Banerjee, deputy vice-president – Currency Derivatives & Interest Rate Derivatives at Kotak Securities Ltd.

 

So far in September, foreign portfolio investors have net invested $1.48 bln in Indian debt and equities.

 

However, shortly afterwards, foreign banks purchased dollars on behalf of importers and oil marketing companies, after which the Indian unit erased some of its gains, dealers said. Importers and oil market companies bought dollars to take advantage of the relatively lower dollar/rupee levels, they added.

 

Prices of crude oil rose slightly today, with the Brent crude oil contract for November delivery above the $92-per-barrel mark as concerns about tight supply offset worries that global demand for fuel could fall due to a strong US dollar and expectations of large rate hikes.

 

At 1545 IST, the November contract of Brent crude oil on the Intercontinental Exchange was at $92.20 a bbl, against $92.00 a bbl on Monday. On Friday, the November contract had settled at $91.35 a bbl.

 

Meanwhile, volumes in the currency market were lower than usual as traders remained cautious and avoided placing fresh bets ahead of the outcome of the US Federal Reserve’s policy meeting on Wednesday. 

 

Markets have already priced in at least another 75-basis-point increase at this week’s Federal Open Market Committee meeting, while there are 19% odds of a 100-bps hike.

 

“As this (FOMC) meeting will have a fresh economic projection and dot plot, the market will closely scrutinise Fed’s growth, inflation, and terminal rate projections,” Banerjee said. “Traders are already pricing in the worst from FOMC, so it will be hard to surprise the market.”  

 

 AT 1530 ISTAT 0900 ISTHIGHLOW

PREVIOUS

(AT 1530 IST)

Spot rupee per $179.750079.700079.575079.772579.7700

 

FORWARDS

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

 

The premium on the one-year, exact-period dollar/rupee forward contract was at 225.77 paise as against 224.19 paise at Monday’s close. On an annualised basis, the premium was at 2.83% as against 2.81% at the previous close.

 

Volumes and movement remains subdued today as traders refrained from taking large bets ahead of the outcome of the Fed’s monetary policy meeting due Wednesday.

 

A recent sharp fall in premium levels also pushed banks and importers to cover dollars for forward delivery at relatively low levels, dealers said.

 

OUTLOOK

On Wednesday, the rupee will remain steady as traders are likely remain on sidelines ahead of the Fed policy meet outcome.

 

The Indian currency may take cues from overnight movement in the dollar index and crude oil prices.

 

On Wednesday, the rupee is seen at 79.50-80.00 a dollar.

India Rupee: Premiums tad up on forward dlr buys by some importers

 

 AT 1358 ISTAT 0900 ISTHIGHLOWPREVIOUS(AT 1530 IST)Spot rupee per $179.727579.700079.575079.730079.77001-year dlr/rupee fwd (paise)224.77224.27224.95223.77224.19

 

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

 

The premium on the one-year, exact-period dollar/rupee forward contract was at 224.77 paise as against 224.19 paise at Monday’s close. On an annualised basis, the premium was at 2.82% as against 2.81% at the previous close.

 

“Mild buying interest seen from importers today as levels are attractive, but market is very quiet,” said a dealer with state-owned bank. “This is calm before the storm.”

 

Volumes and movement remains subdued today as traders refrained from taking large bets ahead of the outcome of the US Federal Open Market Committee’s monetary policy meeting due Wednesday.

 

A recent sharp fall in premium levels also pushed banks and importers to cover dollars for forward delivery at relatively low levels.

 

Last week, premiums fell by 8-10 basis points across tenures as a higher-than-expected US CPI inflation print had the market betting on a narrower interest rate differential between India and the world’s largest economy. (Richard Fargose)

India Rupee: Erases some gains as bks buy dlrs for oil cos, importers

 

 AT 1310 ISTAT 0900 ISTHIGHLOW

PREVIOUS

(AT 1530 IST)

Spot rupee per $179.687579.700079.575079.717579.7700

 

NEW DELHI – The rupee erased some gains against the greenback as foreign banks purchased dollars on behalf of importers and oil marketing companies, dealers said. 

 

Dealers said that importers and oil market companies bought dollars to take advantage of the relatively lower dollar/rupee levels.

 

However, volumes in the currency market were lower than usual as traders remained cautious and avoided placing fresh bets ahead of the outcome of the US Federal Reserve’s policy meeting on Wednesday. 

 

Markets have already priced in at least another 75-basis-point increase for this week’s Federal Open Market Committee’s meeting, while there is a 19% odds of a 100-bps hike.

 

For the rest of the day, the Indian unit is seen moving in the range of 79.5000-79.8500 a dollar. (Pratiksha)

India Rupee-Asia FX: Most units up tracking gains in local equities

 

MUMBAI – Most Asian currencies traded higher against the US dollar today, tracking gains in local equity markets.

 

Asian equities shrugged off recent weakness and rebounded tracking overnight gains in the US markets.

 

However, movement in currency markets remains range-bound today as investors refrained from aggressive bets in the run-up to outcome of the US Federal Reserve policy on Wednesday.

 

Market participants have already priced in another interest rate hike of 75 basis points by the Fed. The Fed’s commentary will be closely watched for cues on the timeline of its rate-hike cycle.

 

At 1035 IST, the dollar index, which measures the strength of the greenback against a basket of six major currencies, was at 109.66 compared with 109.74 on Monday. It was at 109.76 on Friday. (Richard Fargose)

India Rupee: Rises tracking surge in domestic shrs; Fed outcome eyed

 

 AT 0935 ISTAT 0900 ISTHIGHLOW

PREVIOUS

(AT 1530 IST)

Spot rupee per $179.670079.700079.655079.717579.7700

 

NEW DELHI – The rupee rose against the greenback today, tracking a surge in domestic equity indices, dealers said. 

 

At 0935 IST, the Nifty 50 and the Sensex were 1.2% and 1.1% higher, respectively.

 

Dealers expect support for rupee from likely inflows from foreign portfolio investors in Indian equity and debt markets.

 

So far in September, foreign portfolio investors have net invested $1.48 bln in Indian debt and equities.

 

Meanwhile, traders are cautious ahead of the outcome of US Federal Reserve’s two-day policy meeting, which begins today, dealers said. 

 

Markets have already priced in at least another 75-basis-point increase for this week’s Federal Open Market Committee’s meeting, and 19% odds of a 100-bps hike.

 

“I think the range for rupee will remain 79.50-79.70 today, since there will be caution ahead of the Fed outcome,” a dealer with a state-owned bank said. 

 

For the rest of the day, the Indian unit is seen moving in the range of 79.5000-79.8500 a dollar. (Pratiksha)

India Rupee: Expected range for rupee – Sep 20

 

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 bank79.8579.50State-owned bank79.8079.50Foreign bank79.8279.45Private bank79.7579.50Private bank79.8579.57Brokerage firm79.8079.50

 

(Richard Fargose)

 

End

 

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

 

Edited by Aditya Sakorkar

 

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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