India Rupee Review: At 1-wk low on dlr buys for oil cos, FX outflows

Informist, Tuesday, Aug 29, 2023

 

By Ananya Chaudhuri

 

NEW DELHI – The rupee ended at a one-week low against the dollar today as banks persistently purchased the greenback for oil marketing companies and foreign fund outflows, dealers said. 

 

Today, the Indian currency settled 0.1% lower at 82.7050 against the US unit compared to 82.6300 a dollar on Monday. Also, the rupee was the worst performing currency among its Asian peers today. Asian currencies rose in the range of 0.1-0.3% against the dollar. 

 

The Indian currency started the day largely steady against the greenback at 82.5850 due to lack of major cues as traders await the releases of key economic US data this week, dealers said.

 

Market participants now await a slew of key economic data, including the US personal consumption expenditures index on Thursday and the US jobs report for August on Friday, to assess the Federal Reserve’s monetary policy path going ahead. 

 

Shortly after opening, the rupee touched the day’s high of 82.5750 against the US unit.

 

The Indian unit started to move lower against greenback as banks stepped in to buy dollars for oil marketing companies, dealers said.

 

Crude oil prices rose today on supply side worries as an intensifying tropical storm Idalia moving towards the Florida’s Gulf Coast is expected to disrupt crude oil production in the region. 

 

At 1623 IST, the October contract of Brent crude oil on the Intercontinental Exchange was at $85.1 a bbl as against $84.42 a bbl on Monday. It was at $84.48 a bbl on Friday. The prices rose as much as $85.11 a bbl during the day. 

 

“It (rupee) opened around 82.58 (a dollar), and now it (rupee) has come down to 82.70 (a dollar); oilers buying (dollars),” a dealer at a big state-owned bank said. 

 

Banks also purchased the US currency ahead of the daily reference rate fixing which further put pressure on the local unit, dealers said. 

 

During the last leg of the trade, the Indian currency fell to the day’s low of 82.7250 against the dollar as banks stepped up their dollar purchases for foreign fund outflows from an Indian corporate, and oil companies. 

 

“Dollar buying by a public sector corporate to the tune of $700 mln took the rupee down to 82.7225 (a dollar) during the day as the market awaited for the GDP data from the US and India,” Anil Kumar Bhansali, head of treasury and executive director, Finrex Treasury Advisors LLP.

 

For most of the session, the Indian unit traded in a tight range of 15 against the dollar as traders avoided placing fresh bets on lack of significant cues. Volumes in the currency market was also subdued today. 

 

A rise in domestic equity indices supported the Indian currency, dealers said. Today, the benchmark Nifty 50 and the Sensex ended 0.2% and 0.1% higher respectively. 

 

 AT 1530 ISTAT 0900 ISTHIGHLOWPREVIOUS(AT 1530 IST)Spot rupee per $182.705082.585082.575082.725082.63001-year dlr/rupee fwd (paise)133.26121.54134.26121.54132.11

 

FORWARDS

Premiums on one-year dollar/rupee forwards ended steady, tracking steady US Treasury yields dealers said.

 

US Treasury yields remained steady today as traders exercised caution before release of a slew of key US economic data this week to get fresh cues about the US Federal Reserve’s rate hike trajectory going forward. 

 

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

 

The premium on the one-year dollar/rupee contract was 133.26 paise, against 132.11 paise on Monday. On an annualised basis, the premium was at 1.59%, against the previous close of 1.59%.

 

OUTLOOK

On Wednesday, the rupee will take cues from the dollar index and crude oil prices, dealers said. The Indian currency may also track movement in the offshore Chinese yuan, they said.

 

“Tomorrow it (rupee) is also expected to be in the same range. We’ll get some direction after US JOLTS (Job Opening Labor Turnover Survey) data release later today,” a dealer at a state-owned bank said.  

 

Market participants await the release of a slew of key US economic data this week for fresh cues about the US Fed’s rate hike trajectory going forward. 

 

Amongst the batch of key economic data releases is the US consumer confidence data, due later today, while a revised reading on Apr-Jun gross domestic product is due on Wednesday. Readings on personal consumption expenditures, the US Federal Reserve’s preferred inflation gauge, is due on Thursday, while August nonfarm payrolls will be released on Friday. 

 

Dealers have pegged key technical support for the rupee at 82.80 a dollar. During the day, the rupee is seen in the range of 82.40-82.90 a dollar.

India Rupee – World FX: Dlr index dn before key econ data; euro falls

 

 AT 1558 ISTHIGHLOWPREVIOUSGBP/USD 1.26121.26361.26021.2600EUR/USD 1.08121.08401.08061.0819NZD/USD 0.59250.59360.59040.5904AUD/USD 0.64430.64540.64230.6425USD/JPY 146.5390146.5900146.3120146.5330USD/CAD 1.36061.36131.35871.3593EUR/JPY 158.4380158.6700158.2470158.5280CHF/USD 1.13061.13311.12981.1316EUR/CHF 0.95620.95690.95580.9558

 

NEW DELHI – The dollar index remained lower during European trade today ahead of the release of a slew of crucial US economic data this week.

 

Amongst the key data releases is the US consumer confidence data, due later today, while a revised reading on Apr-Jun GDP is due on Wednesday. Readings on personal consumption expenditures, the US Federal Reserve’s preferred inflation gauge, is due on Thursday, while August nonfarm payrolls will be released on Friday. 

 

Market participants are keenly awaiting these data points to get more cues on the US central bank’s policy tightening path going ahead.

 

At 1558 IST, the dollar index, which measures the strength of the greenback against a basket of six major currencies, was at 104.04 as against 104.08 on Monday. It was at 103.98 on Friday. The index fell to a low of 103.83 earlier today.

 

The euro fell 0.1% against the dollar after a GfK institute survey showed German consumer sentiment is expected to fall in September due to declining income expectations and propensity to buy. Market participants also await the Eurozone 

inflation data, which is due on Thursday. 

 

The Australian dollar rose 0.3% against the greenback ahead of the release of the country’s July inflation data, due on Wednesday. Investors expect data to show a further slowdown in July consumer prices and prompt the Reserve Bank of Australia to stand pat on interest rates. (Pratiksha)

India Rupee: In thin band amid low volume on lack of significant cues

 

 AT 1254 ISTAT 0900 ISTHIGHLOWPREVIOUS(AT 1530 IST)Spot rupee per $182.670082.585082.575082.672582.6300

 

 

NEW DELHI – The rupee moved in a narrow range of 10 paise against the dollar as traders avoided placing fresh bets due to lack of significant cues ahead of key US economic data releases later this week, dealers said. 

 

“Market is not getting any direction. Major data releases are there (later this week), US GDP, US jobless claim data, after that USD/INR will get direction,” a dealer at a state-owned bank said.

 

Investors are awaiting a slew of key economic data, including on the US personal consumption expenditures index on Thursday and the US jobs report for August on Friday, to assess the Federal Reserve’s monetary policy path going ahead. 

 

At 1254 IST, the dollar index, which measures the strength of the greenback against a basket of six major currencies, was at 104.04 as against 104.08 on Monday. It was at 103.98 on Friday. The index rose to an over 12-week high of 104.45 on Friday. 

 

Dealers said banks purchased the greenback ahead of the daily reference rate fixing, which weighed on the Indian unit. 

 

However, gains in domestic equity indices supported the local currency, dealers said. At 1254 IST, the Nifty 50 and the Sensex were up 0.2% and 0.1%, respectively.

 

Dealers see immediate key technical support for the rupee at 82.80 a dollar. During the day, the rupee is seen in the range of 82.40-82.80 a dollar. (Ananya Chaudhuri)

India Rupee: Largely steady on lack of cues; key US econ data awaited

 

 AT 0923 ISTAT 0900 ISTHIGHLOWPREVIOUS(AT 1530 IST)Spot rupee per $182.612582.585082.575082.617582.6300

 

NEW DELHI – The rupee was largely steady against the dollar today as traders refrained from placing fresh bets due to the absence of significant triggers, dealers said.

 

Dealers said volumes in the currency market may remain lacklustre today as traders now keenly await a slew of key economic data, including the US personal consumption expenditures index on Thursday and the US jobs report for August on Friday, to assess the Federal Reserve’s monetary policy path going ahead.

 

“The current thin range of 82.50-82.65 (a dollar) should sustain ahead of the important data points in the US,” said a dealer with a state-owned bank. “Until and unless, there are significant inflows in the market, I don’t see the range breaking.”

 

As Fed Chair Jerome Powell said at the recent Jackson Hole Economic Policy Symposium that the Fed will await upcoming economic data to decide on further interest rate path, this batch of key US economic data becomes even more important.

 

“We will proceed carefully as we decide whether to tighten further or instead to hold the policy rate constant and await further data… It is the Fed’s job to bring inflation down to our 2% goal, and we will do so,” Powell had said.

 

The dollar index fell ahead of the release of the economic data, which provided support to the Indian currency, dealers said. 

 

At 0923 IST, the dollar index, which measures the strength of the greenback against a basket of six major currencies, was at 103.84 as against 104.08 on Monday. It was at 103.98 on Friday. The index rose to an over 12-week high of 104.45 on Friday. 

 

A rise in domestic share indices also lent support to the Indian unit, dealers said. At 0923 IST, both the Nifty 50 and Sensex were up 0.2% each. 

 

Dealers see immediate key technical resistance for the rupee at 82.50 a dollar. During the day, the rupee is seen in the range of 82.40-82.80 a dollar. (Pratiksha)

India Rupee – Asia FX: Up as dlr index down ahead of US econ data

 

NEW DELHI – Asian currencies rose against the greenback today as the dollar index fell below the psychologically crucial level of 104.00 amid lack of significant cues ahead of crucial US economic data releases later this week.

 

Investors are awaiting a slew of key economic data, including the US personal consumption expenditures index on Thursday and the US jobs report for August on Friday, to assess the Federal Reserve’s monetary policy path going ahead.

 

At 0913 IST, the dollar index, which measures the strength of the greenback against a basket of six major currencies, was at 103.87 as against 104.08 on Monday. It was at 103.98 on Friday. The index rose to an over 12-week high of 104.45 on Friday.

Asian currencies rose in the range of 0.1-0.4% against the greenback. The Philippine peso emerged as the best performing currency among Asian peers, and rose 0.4% against the dollar. 

 

The Indonesian rupiah and South Korean won were up 0.3% and 0.2% against the US unit, respectively. (Ananya Chaudhuri)

India Rupee: Expected range for rupee – Aug 29

 

NEW DELHI – Following are the expected support and resistance levels for the rupee today, as forecasted by leading banks and brokerages in an Informist poll:

 

ParticipantsSUPPORTRESISTANCEBig private bank82.8582.50State-owned bank82.7082.40State-owned bank82.7582.45Private bank82.7082.50Private bank82.6982.49Foreign bank82.8082.45Brokerage firm82.6882.48Brokerage firm82.7582.45

 

 

 

 

 

 

 

 

 

 

 

 

(Pratiksha)

 

End

 

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

 

Edited by Vidhi Verma

 

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