Informist, Tuesday, Dec 28, 2021
By Pratiksha
NEW DELHI – The rupee ended sharply higher against the dollar today as some foreign banks sold the US unit on behalf of exporters who wanted to meet their year-end requirements, said dealers.
“The rupee saw an upward trend as there was selling (of dollars) for exporters ahead of year-end,” said a dealer with a state-owned bank. “However, I think the rupee will retrace its path once this year ends.”
The Indian currency rose further because banks sold the dollar after stop-losses were triggered around 74.80 a dollar levels, said dealers.
The rupee settled at 74.6500 a dollar today, against 74.9950 a dollar at 1530 IST on Monday. It had risen to a day’s high of 74.6050 a dollar.
The Indian unit had opened higher at 74.9100 a dollar tracking a sharp rise in domestic and Asian equity indices that strengthened on optimism that the fast-spreading Omicron variant of COVID-19 would not limit global economic recovery.
The Nifty 50 and the Sensex ended over 0.8% higher each.
Market sentiment was also boosted after a World Health Organization official confirmed that currently, there are no indications to suggest that Omicron causes a more severe impact than the previous COVID-19 variants such as Delta.
“The rupee can benefit from the rise in stocks and the fading concerns about the severity of the Omicron variant,” said a dealer with a brokerage.
Back home, the Indian government approved two more vaccines–Corbevax, Covovax–and anti-viral drug Molnupiravir for emergency use.
India reported 6,358 COVID-19 cases and 293 deaths in the past 24 hours, while the Omicron tally in the country stood at 653.
“The market has gained confidence that the Omicron variant spread won’t limit economic growth,” said a dealer with a state-owned bank. “But I still don’t think the rupee will appreciate beyond the 74.50/$1 level in the coming days.”
Meanwhile, the dollar index remained elevated against a basket of major currencies due to muted participation near the end of the year, according to dealers.
At 1614 IST, the dollar index, which measures the strength of the US currency against a basket of six major currencies, was at 96.03 compared with 96.09 on Monday. It was at 96.02 on Thursday.
On the flip side, prices of Brent crude oil had surged earlier today despite cancellation of flights across the world over the weekend as investors were hopeful that the fast-spreading Omicron variant may not impact global demand for fuel much. This weighed on the local unit.
At 1614 IST, the February contract of Brent crude on the Intercontinental Exchange was at $79.29 per barrel compared with $78.60 per bbl at the previous close. It was at $76.14 per bbl on Friday.
Financial markets in New Zealand, Australia, the UK, Hong Kong, and Canada were closed today in observance of Boxing Day.
FORWARDS
The premium on the dollar/rupee forwards contract rose marginally today due to dollar purchases by foreign banks for forward delivery on behalf of importers, dealers said.
On an annualised basis, the premium on the one-year, exact-period dollar/rupee contract was at 4.61%, compared with 4.60% on Monday. The premium was at 344.00 paise compared with 345.07 paise on Monday.
OUTLOOK
On Wednesday, the rupee may take opening cues from overnight movement in the dollar index and Brent crude oil prices, said dealers.
“Once the year-end selling (of dollars) ends, the market will see aggressive (dollar) buying from the oil importers in the coming days”, said a dealer with a state-owned bank.
The rupee is seen in the range of 74.6000-75.0000 a dollar during the day.
India Rupee – World FX: Sterling, euro steady as Omicron worry fades
MUMBAI – The pound sterling and the euro were largely steady against the dollar in European trade today because uncertainty about the economic impact of the Omicron variant of COVID-19 eased and investors’ risk appetite improved.
Meanwhile, French Prime Minister Jean Castex announced a series of measures on Monday imposed due to the ongoing spike of Omicron-related cases in France.
The Japanese yen was slightly lower against the dollar today despite data showing that industrial production in Japan grew better-than-expected at 7.2% on month in November.
The dollar index, which measures the strength of the US currency against a basket of six major currencies, remained largely flat in European trade. At 1542 IST, it was at 96.03 compared with 96.09 on Monday and 96.02 on Thursday. US markets were closed on Friday for Christmas.
The Australian dollar and the New Zealand dollar were up 0.2% and 0.6% against the greenback, respectively. (Arushi Jain)
India Rupee: Rises more as stop-losses triggered at 74.80/$1 level
NEW DELHI – The rupee rose further against the dollar today as stop-losses were triggered around 74.80 a dollar level today, said dealers.
The Indian unit also rose because some foreign banks sold the US unit on behalf of exporters due to year-end inflows, said dealers.
“As 74.80/$1 level breached, there was sudden dollar selling across the board,” said a dealer with brokerage.
As stop-losses got triggered at 74.80/$1 level, the rupee rose to the day’s high of 74.67/$1.
A sharp rise in domestic and Asian equity indices on optimism that the fast-spreading Omicron variant of coronavirus would not limit global economic recovery, also supported the sentiment for rupee. At 1430 IST, the Nifty 50 and the Sensex were up nearly 0.8% each.
For the rest of the session, the rupee is seen moving in a range of 74.6000-74.8500 a dollar range. (Pratiksha)
India Rupee: Up on strong shares, optimism Omicron may not hit growth
NEW DELHI – The rupee rose against the dollar today tracking a sharp rise in domestic and Asian equity indices that strengthened on optimism that the fast-spreading Omicron variant of COVID-19 would not limit global economic recovery, said dealers.
At 1039 IST, the Nifty 50 and the Sensex were up nearly 0.6% each.
Sentiment for riskier assets, including the rupee, got a boost after a World Health Organization official confirmed that currently there is no indication to suggest that Omicron causes a more severe impact than the previous COVID-19 variants such as Delta.
Separately, the dollar index remained steady against a basket of major currencies today due to muted participation near the end of the year, said dealers.
At 1039 IST, the dollar index, which measures the strength of the US currency against a basket of six major currencies, was at 96.10 compared with 96.09 on Monday. It was at 96.02 on Thursday.
“The market is expected to be rangebound at least until month-end, since volumes are very low,” said a dealer with a state-owned bank. “I don’t see the rupee appreciating more than 74.80/$1 because no major (foreign fund) inflows are expected today.”
Financial markets in New Zealand, Australia, the UK, Hong Kong, and Canada will remain closed today in observance of Boxing Day.
The rupee is seen moving in a range of 74.7000-75.1500 a dollar during the day.(Arushi Jain and Pratiksha)
India Rupee: Expected range for rupee – Dec 28
NEW DELHI – The following are the expected support and resistance levels for the rupee, as forecasted by leading banks and brokerages in an Informist poll:
(Pratiksha)
India Rupee – Asia FX: Largely steady as Omicron impact seen subdued
NEW DELHI – Asian currencies were largely steady against the dollar today because of optimism that the rapidly-spreading Omicron variant of COVID-19 may not impact global economic recovery.
Omicron, which has been marked as the ‘variant of concern’ by the World Health Organisation, has led to the emergence of a new wave of COVID-19 infection in several countries across the globe.
Market sentiments were boosted after a WHO official said that currently there is no indication to suggest that Omicron causes a more severe impact than previous COVID-19 variants such as Delta.
Asian units were also steady because trade volumes across the major markets have been low ahead of calendar year-end.
However, the Thai baht fell 0.1% against the greenback as a surge in COVID-19 cases worldwide dimmed the tourism prospects of the country.
The tourism-reliant economy was hit as more than 4,500 flights were cancelled during the Christmas weekend. (Pratiksha)
End
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Shirsha Thakur
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