India Rupee Review: At near 1-mo low as mkt focuses on global risks

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Friday, May 22

 

By Mimansa Verma

 

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MUMBAI – Shrugging off announcements by the Reserve Bank of India earlier today, the rupee ended sharply lower against the US dollar because market players focussed on risks to global economic recovery due to souring ties between the US and , dealers said.

 

Trade volumes in the global currency have dwindled significantly due to uncertainties, as well as a lack of solid triggers. Back home, the fall in the rupee was exacerbated by muted volumes as traders refrained from placing large bets on the greenback amid the nationwide lockdown to curb the spread of the coronavirus, dealers said. 

 

Today, the rupee settled at 75.9500 a dollar, the lowest since Apr 28, and near the psychologically-crucial 76.00-a-dollar mark. On Thursday, the Indian unit closed at 75.6050 a dollar at 1400 IST. 

 

“All of these things are already discounted in the market,” a dealer with a big state-owned bank said. “The economy is in , and this situation will take 12-16 months to recover. Unless there is some news on the vaccine, people are not going to take a clear-cut view on the rupee…the uncertainty is so high that you may see a breakout on either side, but only after lockdown ends.”

 

Global risk sentiment took a hit after US President Donald Trump said Washington would take “strong actions” if China introduces a new national security legislation for Hong Kong. This ratcheted up concerns about Hong Kong’s autonomy and its special status.

 

Further, the US Senate, earlier this week, had passed a legislation that could ban many Chinese companies from listing on American exchanges or raising money from US investors without following regulatory and audit standards. This raised fears over whether the ‘phase-one’ trade agreement between the world’s two largest economies will remain in place.

 

Risk aversion worldwide prompted investors to rush towards the safe-haven greenback, thereby weighing on the rupee and domestic equities as well, dealers said. At 1615 IST, the dollar index was at 99.78, compared with 99.37 late on Thursday.

 

Some foreign banks were said to have purchased dollars, likely for foreign portfolio investors, who may have pulled out funds from local benchmark indices.

 

At home, RBI Governor Shaktikanta Das, in an out-of-schedule monetary policy address announced that the Monetary Policy Committee decided to lower the repo rate by 40 basis points to an all-time low of 4.00% to combat economic risks linked to the COVID-19 pandemic. 

 

While acknowledging the severe damage to the economy from the pandemic, Das said measures announced earlier to reduce the financial strain from the coronavirus–such as the moratorium on loans, deferment of interest on working capital facilities, and asset classification standstill, among others–were extended by another three months to Aug 31.

 

Among other measures, the central bank increased the maximum permissible period of pre-shipment and post-shipment export credit sanctioned by banks to 15 months from the existing one year. These steps, however failed to enthuse currency market players.

 

Even though the rupee remained resilient around technical support level of 75.85 a dollar in a choppy trade, it was only when the Indian unit failed to rise past 75.75 a dollar that importers stepped in to purchase the greenback at relatively lower dollar/rupee levels, dealers said. 

 

With some dealers speculating the RBI’s presence in the spot market on selling as well as buying side, the Indian currency is expected to remain confined at 75.50-76.00 a dollar until the lockdown ends on Mar 31. 

 

“…Quite a possibility that RBI is selling on the upside also and is on the long side also. That’s why probably 75.50-75.90 band is being maintained right now,” Sajal Gupta, head of forex and rates at Edelweiss Securities said. 

 

Confusion among market players has also been induced by the anticipation of dollar inflows lined up for Indian companies that are looking to raise funds, dealers said. 

 

Earlier in the day, Reliance Industries said private equity firm Kohlberg Kravis Roberts will invest 113.67 bln rupees in the former’s subsidiary Jio Platforms for a 2.32% stake.

 

This amounts to $1.4 bln at the prevailing exchange rate. KKR will be the fifth investment in Jio Platforms, after Facebook Inc took the largest bite by acquiring 9.99% stake worth $5.7 bln in the company.

 

Amid rising cases of coronavirus cases across the country, market players preferred to trim their bets on the greenback that they had placed during the day by the end of trade to avoid exposure to currency risks during the weekend, dealers said. 

 

According to the latest data by health ministry, the total number of confirmed COVID-19 cases in India rose to 118,447, with 6,088 new cases reported in the last 24 hours.

 

 

1400 IST

1000 IST

HIGH

LOW  

PREVIOUS
(AT 1400 IST)

75.9500

75.7300

75.7100

75.8100

75.6050

 

FORWARDS MARKET

Premiums on the dollar/rupee forward contracts fell today because the RBI today lowered interest rates in an out-of-schedule monetary policy address to combat economic risks linked to the COVID-19 pandemic, dealers said. 

 

Das announced the Monetary Policy Committee’s to cut repo rate by 40 basis points to a fresh all-time low of 4.00%, taking the total easing to 115 bps since Mar 27.

 

Further, some dealers expect more easing by the central bank in the coming months, which also weighed on premiums across tenures. 

 

“With the outlook remaining benign as lockdown-related supply disruptions are mended, the policy space to address growth concerns needs to be used now rather than later to support the economy, even while maintaining headroom to back up the revival of activity when it takes hold,” Das said.

 

Trade volumes, however, remained muted amid the nationwide lockdown, dealers said. 

 

On an annualised basis, the premium on the one-year exact-period dollar/rupee contract settled at 3.89%, compared with 3.97% at the previous close. The one-year month-end dollar/rupee contract closed at 269.50 paise, against the previous close of 274.50 paise.  

 

OUTLOOK

Domestic are shut on Monday on account of Eid.

 

On Tuesday, the Indian currency is expected to take cues from developments related to COVID-19 and US-China trade relations over the extended weekend at home, dealers said.

 

Dealers expect the rupee to be supported by likely dollar inflows for Indian companies that are looking to raise funds. Also, the RBI may step in to curb steep losses beyond 76.10 a dollar if the rupee falls below 76.00 a dollar on Tuesday, dealers said. 

 

The dollar/rupee currency pair is expected to move in a range of 75.70-76.10 a dollar.


India Rupee – World FX: Pound sterling down on weak UK retail data

 

  AT 1525 IST HIGH LOW PREVIOUS
GBP/USD  1.2174 1.2239 1.2163 1.2224
EUR/USD  1.0892 1.0958 1.0887 1.0946
NZD/USD  0.6105 0.6130 0.6093 0.6118
AUD/USD  0.6527 0.6576 0.6512 0.6560
USD/JPY  107.4800 107.7640 107.3230 107.6590
USD/CAD  1.4023 1.4035 1.3942 1.3954
EUR/JPY  117.0640 117.9800 117.0320 117.8640
CHF/USD  1.0281 1.0312 1.0276 1.0301
EUR/CHF  1.0594 1.0633 1.0591 1.0626

MUMBAI – The pound sterling fell against the US dollar following weak retail sales data in the UK that fell by a record 18% in April due to the lockdown imposed to curb the spread of novel coronavirus. The lockdown has brought the economy to a near standstill.

 

This was the sharpest on record fall in retail sales. Further, as per data released earlier today, the UK government’s borrowing hit record high in April, with public debt nearly 100% of GDP. 

 

A decline in the global risk appetite also weighed on the pound, and other major currencies as well, following US President Donald Trump’s comments that “strong actions” would be taken against China if it proceeds to impose new national security legislation on Hong Kong. The bill will primarily break the “one country, two systems” agreement and will repeal democracy in the Special Administrative Region. This comes after last year’s pro-democracy unrest in Hong Kong. 

 

Investors tread with caution amid rising tensions between the world’s two largest economies, as it stoked concerns about the Phase-I trade deal signed between them earlier this year.

 

Further, the US State Department approved a $180-mln sale of advanced torpedoes to the military. This move is expected to worsen relations between Beijing and Washington as China considers to be a part of its territory.

 

This comes after the US Senate approved a new legislation on Wednesday that could bar many Chinese companies from listing shares on US exchanges or raising money from US investors without following regulatory and audit standards, and as the US continued to criticise China’s handling of the coronavirus crisis.

 

Weak employment data in the US also weighed on sentiment. Report by the Labor Department on Thursday showed 2.44 mln people sought unemployment benefits in the week ended May 16, bringing the total number of unemployed US citizens to nearly 40 mln.  (Akansha Victor)


 

India Rupee: Premiums fall as RBI cuts interest rates; volumes muted

 

 

 

AT 1350 IST

OPEN

HIGH

LOW

PREVIOUS

Spot rupee

per $1

75.9000

75.7300

75.7100 75.9125

75.6050

1-year fwd premium
(exact period)

3.87%

3.83%

3.87%

3.83%

3.97%

MUMBAI–1350 IST–Premiums on the dollar/rupee forward contracts fell today because the Reserve Bank of India lowered interest rates in an out-of-schedule monetary policy address earlier today to combat economic risks linked to the COVID-19 pandemic, dealers said. 

 

On an annualised basis, the premium on the one-year exact-period dollar/rupee contract was at 3.87%, compared with 3.97% at the previous close. At 1350 IST, the one-year month-end dollar/rupee contract was at 268.00 paise, against the previous close of 274.50 paise.  

 

RBI Governor Shaktikanta Das announced the Monetary Policy Committee’s decision to cut repo rate by 40 basis points to a fresh all-time low of 4.00%, taking the total easing to 115 bps since Mar 27.

 

Further, some dealers expect more easing by the central bank in the coming months, which also weighed on premiums across tenures. 

 

“With the inflation outlook remaining benign as lockdown-related supply disruptions are mended, the policy space to address growth concerns needs to be used now rather than later to support the economy, even while maintaining headroom to back up the revival of activity when it takes hold,” Das said.

 

Trade volumes, however, remained muted amid the nationwide lockdown, dealers said. 

 

For the rest of the day, premium on the one-year exact-period dollar/rupee forwards contract is seen at 3.83-3.88%.  (Mimansa Verma)


India Rupee: Falls more as PSU bks buy dollars, likely for importers

 

  At 1345 IST 1000 IST HIGH LOW

PREVIOUS

(at 1400 IST)

Spot rupee per $1 75.8850 75.7250 75.7100 75.9125 75.6050

 

MUMBAI–1345 IST–The rupee fell further against the US dollar as importers purchased the greenback noting resistance near 75.75 per dollar, dealers said. 

 

Two major state-owned banks and a privates bank were among buyers of the greenback, dealers said.

 

“People are on the long-side right now, some may have taken fresh long(on dollar) from 75.78-79 (per dollar) levels, but I think there will be some resistance near figure(76.00 per dollar level), where people could book profits,” said a dealer with state-owned bank

 

Weakness in local equities also weighed on the rupee, dealers said. 

 

The rupee is expected to move within a band of 75.65-75.95 a dollar for the rest of the day.  (Akansha Victor)


India Rupee – F&O: Dlr/rupee rises as Indian unit down in spot mkt

 

  AT 1325 IST OPEN HIGH LOW

PREVIOUS CLOSE

Spot dollar/rupee 75.8800 75.7250 75.8800 75.7100 75.6050
1-month futures on NSE 75.9125 75.6500 75.9275 75.6125 75.5250
1-month futures on BSE 75.9175 75.6700 75.9175 75.6075 75.5225
1-month futures on MSEI 75.8875 75.6625 75.8875 75.6625 75.5300

 

MUMBAI – The one-month dollar/rupee May contract rose as the Indian currency weakened against the greenback in the spot market, dealers said.

 

Open interest in the May contract fell 1.41%

 

MAY FUTURES NSE BSE   MSE
Volume 1,208,037 506,897 5,277
Open interest 1,827,000 2,807,299 44,967

(Akansha Victor)


India Rupee – NDF:Dlr/rupee rises tracking global strength in US dlr

MUMBAI – The dollar/rupee rate for the one-month offshore non-deliverable forwards contract rose sharply today, aligning with the global strength in the US dollar.

 

At 1255 IST, the one-month dollar/rupee offshore contract was at 76.05, compared with 75.87 late on Thursday. The dollar index, that measures the strength of the greenback against six major currencies, was at 99.68 as against 99.37 late on Thursday.

 

Global risk sentiment took a hit on the back of fresh concerns about relations between the US and China after US President Donald Trump said Washington would take “strong actions” if China introduces a proposal for new national security law on Hong Kong.

 

The US Senate had, earlier passed a legislation that could ban many Chinese companies from listing their shares on US exchanges or raising money from US investors without following regulatory and audit standards. This also raised fears over whether the ‘phase-one’ trade agreement between the world’s two largest economies will remain in place.

 

Back home, market players remained jittery about India’s weak macroeconomic fundamentals given that the nationwide lockdown imposed to contain the spread of coronavirus brought economic activity to a halt. To address these risks, the Reserve Bank of India Governor Shaktikanta Das announced a cut in the repo rate by 40 basis points to 4.00% in an out-of-schedule monetary policy briefing, today.

 

However, currency market players shrugged off the announcements by Das, and said the rupee is set to weaken further in the coming days given the grim outlook on economic growth.  (Mimansa Verma)


India Rupee: Down on US-China tension; strong support near 75.85/$1

 

  At 1055 IST 1000 IST HIGH LOW

PREVIOUS

(at 1400 IST)

Spot rupee per $1 75.8150 75.7250 75.7100 75.8450 75.6050

 

MUMBAI–1055 IST–The rupee fell against the US dollar as the global risk appetite took a hit due to rising US-China tensions. 

 

However, some banks were said to have sold the greenback, likely for exporters, supporting the rupee, dealers said. 

 

“There was some profit booking near 75.85 (per dollar), it’s a strong technical resistance (for dollar). But I think it will be on the depreciation side only due to trade war tensions and equity is also down,” said a dealer with a state-owned bank. “I’ve heard about some Reliance-related inflows as well.”

 

The anticipation of foreign fund inflows also supported the rupee, dealers said. Media reports said Jio Platforms has raised about $8.9 bln from technology investors including Facebook, Silver Lake, Vista Equity Partners and General Atlantic in less than four weeks, out of which Facebook has taken the largest bite. While some inflows were said to have already hit the market, some portion might still be in the pipeline, dealers said.

 

The fall in local share indices also weighed down the rupee, dealers said. At 1040 IST, domestic benchmark indices–Nifty 50 and BSE-Sensex–were nearly 1.4% lower.

 

However, trade volumes in the currency market were muted given that staff strength at banks’ treasury desks is minimal, amplifying movements in the dollar/rupee currency pair, dealers said. 

 

The rising tension between the world’s two largest economies weighed on global investors’ sentiment, lifting the US dollar globally. 

 

On Thursday, US President Donald Trump said “strong actions” would be taken against China if it proceeds to impose new national security legislation on Hong Kong after last year’s pro-democracy unrest. 

 

This comes after, the US Senate approved a new legislation on Wednesday that could bar many Chinese companies from listing shares on US exchanges or raising money from US investors without following regulatory and audit standards.

 

Further, the department approved a $180-mln sale of advanced torpedoes to the Taiwanese military. This move is expected to worsen relations between Beijing and Washington as China considers Taiwan to be a part of its territory.

 

According to media reports, the White House has issued a broad  on China’s economic policies, military buildup, disinformation campaigns and human rights violations.

 

Meanwhile, Reserve Bank of India Governor Shaktikanta Das announced a 40-basis-points rate cut to support the economy from the fallout caused due to the spread of coronavirus, the repo rate and reverse repo rate stand at 4.00% and 3.35%, respectively. 

 

Das said the recent economic data warranted the earlier meeting of the Monetary Policy Committee instead of the scheduled one next month. The committee members unanimously voted for a rate cut and will maintain an accommodative stance until growth revives, he said.  

 

The rupee is expected to move within a band of 75.60-75.85 a dollar for the rest of the day.  (Akansha Victor)


India Rupee: Technical Levels for rupee – May 22

 

MUMBAI – At 1000 IST, the rupee was at 75.7300 a dollar, as compared to 75.6050 at 1400 IST on Thursday. At 1030 IST, the rupee was at 75.7825 per dollar.

 

Following are key support and resistance levels for the rupee as predicted by leading banks and brokerages:

 

  S1 S2 R1 R2
Big state-owned bank 75.96 76.06 75.63 75.50
Big private bank 75.85 75.98 75.68 75.55
Private bank 75.91 76.00 75.68

(Mimansa Verma)


India Rupee – Asia FX:Most currencies fall as US-China tensions rise

 

MUMBAI – Most Asian currencies were lower against the US dollar today because escalating tensions between the US and China raised concerns about the pace of global economic recovery.

 

On Thursday, China said it plans to introduce a proposal for new national security law on Hong Kong, which raised concerns that it will tighten Beijing’s grip on the semi-autonomous city. This prompted US President Donald Trump to say that Washington would take “strong actions” if that happens.

 

Moreover, risk sentiment took a hit due to jitters surrounding US’ delisting bill. Global strength in the safe-haven greenback in early trade weighed on Asian currencies.

 

The US Senate has passed a legislation that could ban many Chinese companies from listing their shares on US exchanges or raising money from US investors without following regulatory and audit standards.

 

Investors braced for an annual meeting of the National People’s Congress in China that starts today, where lawmakers are expected to discuss political and economic policy amid the damage caused by the COVID-19 pandemic. Premier of the People’s Republic of China Li Keqiang may announce fresh measures to stimulate the economy.

 

Earlier today, media reports said China has decided not to set an economic growth target for 2020 due to the coronavirus pandemic and global uncertainties.

 

While the South Korean won suffered most losses, falling by over 0.5%, the Chinese was also weighed down by a weaker fixing of parity rate by People’s Bank of China at 7.0939 today, compared with 7.0868 set on Thursday.   

 

The Indonesian rupiah was 0.4% higher against the greenback.  (Mimansa Verma)


India Rupee: Expected range for rupee – May 22

 

MUMBAI – Following are expected support and resistance levels for the rupee, as forecast by leading banks and brokerages in a Cogencis poll:

 

  SUPPORT RESISTANCE
Big state-owned bank 75.95 75.55
State-owned bank 75.80 75.50
Private bank 75.85 75.60

(Akansha Victor)

 

End

 

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

 

 

Edited by Aditya Sakorkar

 

Cogencis Tel +91 (22) 6619-0000

Send comments to feedback@cogencis.com

  AT 1525 IST HIGH LOW PREVIOUS
GBP/USD  1.2174 1.2239 1.2163 1.2224
EUR/USD  1.0892 1.0958 1.0887 1.0946
NZD/USD  0.6105 0.6130 0.6093 0.6118
AUD/USD  0.6527 0.6576 0.6512 0.6560
USD/JPY  107.4800 107.7640 107.3230 107.6590
USD/CAD  1.4023 1.4035 1.3942 1.3954
EUR/JPY  117.0640 117.9800 117.0320 117.8640
CHF/USD  1.0281 1.0312 1.0276 1.0301
EUR/CHF  1.0594 1.0633 1.0591 1.0626

MUMBAI – The pound sterling fell against the US dollar following weak retail sales data in the UK that fell by a record 18% in April due to the lockdown imposed to curb the spread of novel coronavirus. The lockdown has brought the economy to a near standstill.

 

This was the sharpest on record fall in retail sales. Further, as per data released earlier today, the UK government’s borrowing hit record high in April, with public debt nearly 100% of GDP. 

 

A decline in the global risk appetite also weighed on the pound, and other major currencies as well, following US President Donald Trump’s comments that “strong actions” would be taken against China if it proceeds to impose new national security legislation on Hong Kong. The bill will primarily break the “one country, two systems” agreement and will repeal democracy in the Special Administrative Region. This comes after last year’s pro-democracy unrest in Hong Kong. 

 

Investors tread with caution amid rising tensions between the world’s two largest economies, as it stoked concerns about the Phase-I trade deal signed between them earlier this year.

 

Further, the US State Department approved a $180-mln sale of advanced torpedoes to the Taiwan military. This move is expected to worsen relations between Beijing and Washington as China considers Taiwan to be a part of its territory.

 

This comes after the US Senate approved a new legislation on Wednesday that could bar many Chinese companies from listing shares on US exchanges or raising money from US investors without following regulatory and audit standards, and as the US continued to criticise China’s handling of the coronavirus crisis.

 

Weak employment data in the US also weighed on sentiment. Report by the Labor Department on Thursday showed 2.44 mln people sought unemployment benefits in the week ended May 16, bringing the total number of unemployed US citizens to nearly 40 mln.  (Akansha Victor)


 

India Rupee: Premiums fall as RBI cuts interest rates; volumes muted

 

 

 

AT 1350 IST

OPEN

HIGH

LOW

PREVIOUS

Spot rupee

per $1

75.9000

75.7300

75.7100 75.9125

75.6050

1-year fwd premium
(exact period)

3.87%

3.83%

3.87%

3.83%

3.97%

MUMBAI–1350 IST–Premiums on the dollar/rupee forward contracts fell today because the Reserve Bank of India lowered interest rates in an out-of-schedule monetary policy address earlier today to combat economic risks linked to the COVID-19 pandemic, dealers said. 

 

On an annualised basis, the premium on the one-year exact-period dollar/rupee contract was at 3.87%, compared with 3.97% at the previous close. At 1350 IST, the one-year month-end dollar/rupee contract was at 268.00 paise, against the previous close of 274.50 paise.  

 

RBI Governor Shaktikanta Das announced the Monetary Policy Committee’s decision to cut repo rate by 40 basis points to a fresh all-time low of 4.00%, taking the total easing to 115 bps since Mar 27.

 

Further, some dealers expect more easing by the central bank in the coming months, which also weighed on premiums across tenures. 

 

“With the inflation outlook remaining benign as lockdown-related supply disruptions are mended, the policy space to address growth concerns needs to be used now rather than later to support the economy, even while maintaining headroom to back up the revival of activity when it takes hold,” Das said.

 

Trade volumes, however, remained muted amid the nationwide lockdown, dealers said. 

 

For the rest of the day, premium on the one-year exact-period dollar/rupee forwards contract is seen at 3.83-3.88%.  (Mimansa Verma)


India Rupee: Falls more as PSU bks buy dollars, likely for importers

 

  At 1345 IST 1000 IST HIGH LOW

PREVIOUS

(at 1400 IST)

Spot rupee per $1 75.8850 75.7250 75.7100 75.9125 75.6050

 

MUMBAI–1345 IST–The rupee fell further against the US dollar as importers purchased the greenback noting resistance near 75.75 per dollar, dealers said. 

 

Two major state-owned banks and a privates bank were among buyers of the greenback, dealers said.

 

“People are on the long-side right now, some may have taken fresh long(on dollar) from 75.78-79 (per dollar) levels, but I think there will be some resistance near figure(76.00 per dollar level), where people could book profits,” said a dealer with state-owned bank

 

Weakness in local equities also weighed on the rupee, dealers said. 

 

The rupee is expected to move within a band of 75.65-75.95 a dollar for the rest of the day.  (Akansha Victor)


India Rupee – F&O: Dlr/rupee rises as Indian unit down in spot mkt

 

  AT 1325 IST OPEN HIGH LOW

PREVIOUS CLOSE

Spot dollar/rupee 75.8800 75.7250 75.8800 75.7100 75.6050
1-month futures on NSE 75.9125 75.6500 75.9275 75.6125 75.5250
1-month futures on BSE 75.9175 75.6700 75.9175 75.6075 75.5225
1-month futures on MSEI 75.8875 75.6625 75.8875 75.6625 75.5300

 

MUMBAI – The one-month dollar/rupee May contract rose as the Indian currency weakened against the greenback in the spot market, dealers said.

 

Open interest in the May contract fell 1.41%

 

MAY FUTURES NSE BSE   MSE
Volume 1,208,037 506,897 5,277
Open interest 1,827,000 2,807,299 44,967

(Akansha Victor)


India Rupee – NDF:Dlr/rupee rises tracking global strength in US dlr

MUMBAI – The dollar/rupee rate for the one-month offshore non-deliverable forwards contract rose sharply today, aligning with the global strength in the US dollar.

 

At 1255 IST, the one-month dollar/rupee offshore contract was at 76.05, compared with 75.87 late on Thursday. The dollar index, that measures the strength of the greenback against six major currencies, was at 99.68 as against 99.37 late on Thursday.

 

Global risk sentiment took a hit on the back of fresh concerns about relations between the US and China after US President Donald Trump said Washington would take “strong actions” if China introduces a proposal for new national security law on Hong Kong.

 

The US Senate had, earlier passed a legislation that could ban many Chinese companies from listing their shares on US exchanges or raising money from US investors without following regulatory and audit standards. This also raised fears over whether the ‘phase-one’ trade agreement between the world’s two largest economies will remain in place.

 

Back home, market players remained jittery about India’s weak macroeconomic fundamentals given that the nationwide lockdown imposed to contain the spread of coronavirus brought economic activity to a halt. To address these risks, the Reserve Bank of India Governor Shaktikanta Das announced a cut in the repo rate by 40 basis points to 4.00% in an out-of-schedule monetary policy briefing, today.

 

However, currency market players shrugged off the announcements by Das, and said the rupee is set to weaken further in the coming days given the grim outlook on economic growth.  (Mimansa Verma)


India Rupee: Down on US-China tension; strong support near 75.85/$1

 

  At 1055 IST 1000 IST HIGH LOW

PREVIOUS

(at 1400 IST)

Spot rupee per $1 75.8150 75.7250 75.7100 75.8450 75.6050

 

MUMBAI–1055 IST–The rupee fell against the US dollar as the global risk appetite took a hit due to rising US-China tensions. 

 

However, some banks were said to have sold the greenback, likely for exporters, supporting the rupee, dealers said. 

 

“There was some profit booking near 75.85 (per dollar), it’s a strong technical resistance (for dollar). But I think it will be on the depreciation side only due to trade war tensions and equity is also down,” said a dealer with a state-owned bank. “I’ve heard about some Reliance-related inflows as well.”

 

The anticipation of foreign fund inflows also supported the rupee, dealers said. Media reports said Jio Platforms has raised about $8.9 bln from technology investors including Facebook, Silver Lake, Vista Equity Partners and General Atlantic in less than four weeks, out of which Facebook has taken the largest bite. While some inflows were said to have already hit the market, some portion might still be in the pipeline, dealers said.

 

The fall in local share indices also weighed down the rupee, dealers said. At 1040 IST, domestic benchmark indices–Nifty 50 and BSE-Sensex–were nearly 1.4% lower.

 

However, trade volumes in the currency market were muted given that staff strength at banks’ treasury desks is minimal, amplifying movements in the dollar/rupee currency pair, dealers said. 

 

The rising tension between the world’s two largest economies weighed on global investors’ sentiment, lifting the US dollar globally. 

 

On Thursday, US President Donald Trump said “strong actions” would be taken against China if it proceeds to impose new national security legislation on Hong Kong after last year’s pro-democracy unrest. 

 

This comes after, the US Senate approved a new legislation on Wednesday that could bar many Chinese companies from listing shares on US exchanges or raising money from US investors without following regulatory and audit standards.

 

Further, the department approved a $180-mln sale of advanced torpedoes to the Taiwanese military. This move is expected to worsen relations between Beijing and Washington as China considers Taiwan to be a part of its territory.

 

According to media reports, the White House has issued a broad attack on China’s economic policies, military buildup, disinformation campaigns and human rights violations.

 

Meanwhile, Reserve Bank of India Governor Shaktikanta Das announced a 40-basis-points rate cut to support the economy from the fallout caused due to the spread of coronavirus, the repo rate and reverse repo rate stand at 4.00% and 3.35%, respectively. 

 

Das said the recent economic data warranted the earlier meeting of the Monetary Policy Committee instead of the scheduled one next month. The committee members unanimously voted for a rate cut and will maintain an accommodative stance until growth revives, he said.  

 

The rupee is expected to move within a band of 75.60-75.85 a dollar for the rest of the day.  (Akansha Victor)


India Rupee: Technical Levels for rupee – May 22

 

MUMBAI – At 1000 IST, the rupee was at 75.7300 a dollar, as compared to 75.6050 at 1400 IST on Thursday. At 1030 IST, the rupee was at 75.7825 per dollar.

 

Following are key support and resistance levels for the rupee as predicted by leading banks and brokerages:

 

  S1 S2 R1 R2
Big state-owned bank 75.96 76.06 75.63 75.50
Big private bank 75.85 75.98 75.68 75.55
Private bank 75.91 76.00 75.68

(Mimansa Verma)


India Rupee – Asia FX:Most currencies fall as US-China tensions rise

 

MUMBAI – Most Asian currencies were lower against the US dollar today because escalating tensions between the US and China raised concerns about the pace of global economic recovery.

 

On Thursday, China said it plans to introduce a proposal for new national security law on Hong Kong, which raised concerns that it will tighten Beijing’s grip on the semi-autonomous city. This prompted US President Donald Trump to say that Washington would take “strong actions” if that happens.

 

Moreover, risk sentiment took a hit due to jitters surrounding US’ delisting bill. Global strength in the safe-haven greenback in early trade weighed on Asian currencies.

 

The US Senate has passed a legislation that could ban many Chinese companies from listing their shares on US exchanges or raising money from US investors without following regulatory and audit standards.

 

Investors braced for an annual meeting of the National People’s Congress in China that starts today, where lawmakers are expected to discuss political and economic policy amid the damage caused by the COVID-19 pandemic. Premier of the People’s Republic of China Li Keqiang may announce fresh measures to stimulate the economy.

 

Earlier today, media reports said China has decided not to set an economic growth target for 2020 due to the coronavirus pandemic and global uncertainties.

 

While the South Korean won suffered most losses, falling by over 0.5%, the Chinese yuan was also weighed down by a weaker fixing of parity rate by People’s Bank of China at 7.0939 today, compared with 7.0868 set on Thursday.   

 

The Indonesian rupiah was 0.4% higher against the greenback.  (Mimansa Verma)


India Rupee: Expected range for rupee – May 22

 

MUMBAI – Following are expected support and resistance levels for the rupee, as forecast by leading banks and brokerages in a Cogencis poll:

 

  SUPPORT RESISTANCE
Big state-owned bank 75.95 75.55
State-owned bank 75.80 75.50
Private bank 75.85 75.60

(Akansha Victor)

 

End

 

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

 

 

Edited by Aditya Sakorkar

 

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Source: Cogencis

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