Informist, Monday, Jan 31, 2022
By Pratiksha and Arushi Jain
NEW DELHI – The rupee ended sharply higher against the dollar today because private and foreign banks persistently sold the US unit for foreign fund inflows into Bharti Airtel Ltd, said dealers.
“The market saw aggressive selling (of dollars) for (foreign fund) inflows, due to which we saw the rupee jump beyond the 74.60/$1 level,” said a dealer with a state-owned bank.
After moving in a broad range of nearly 44 paise through the day, the Indian unit closed at 74.6100 a dollar against Friday’s close of 75.0400 a dollar.
Bharti Airtel on Friday announced that Alphabet Inc will invest up to $1 bln in the telecom major as part of its Google for India Digitization Fund.
Moreover, some private banks also sold the greenback for overseas investment into Adani Wilmar’s initial public offering. The offer opened for public subscription on Thursday and closed today. The company aimed to raise up to 36 bln rupees.
Further, some banks sold dollars after stop losses were triggered near 74.75-74.80 a dollar levels, which also led to sharp gains in the Indian unit, according to dealers.
A sharp rise in domestic equity indices also supported sentiment for the Indian unit, said dealers. Both the Nifty 50 and the Sensex ended up 1.4% each.
Meanwhile, the dollar index came off earlier highs and inched lower in European trade as investors stayed cautious ahead of monetary policy decisions of several key central banks this week, said dealers.
Noting this, some banks placed fresh bets in favour of the Indian rupee, on behalf of traders, which also supported sentiment for the rupee, according to dealers.
Today, the rupee saw the day’s high at 74.6000 a dollar.
The Bank of England is scheduled to meet on Thursday, with economists predicting a second rate hike in less than two months. The European Central Bank will also hold its policy meeting on Thursday where it is expected to stick to its argument that inflation will recede over time.
The dollar had earlier touched an 18-month high against other major currencies on expectations of aggressive rate hikes in the US this year. It had touched the day’s high of 97.30 earlier today.
At 1648 IST, the dollar index, which measures the strength in the US currency against a basket of six major currencies, was at 97.11, against 97.22 on Friday. It was at 97.26 on Thursday.
However, during early hours of the trading session, some banks had stepped in to purchase dollars for oil marketing companies on elevated Brent crude oil prices, said dealers. This led the local currency to fall to the day’s low of 75.05 a dollar.
Crude oil prices rose for the sixth week amid worries about tight supply and tensions in Eastern Europe and West Asia.
At 1648 IST, the March contract of Brent crude was at $91.34 per barrel on the Intercontinental Exchange compared with the previous close of $90.03 per bbl.
Investors are now keeping an eye on a meeting of the Organization of the Petroleum Exporting Countries and allies led by Russia on Wednesday. The cartel is expected to continue with a planned rise in its oil output target for March, according to reports.
“I was expecting the rupee to remain steady today but the persistent selling (of dollars) and the lack of enough (dollar) buying led to the rupee appreciating more than market’s expectations,” said a dealer with a private bank.
FORWARDS
Premium on the dollar/rupee forwards contract rose due to dollar purchases by foreign banks on behalf of importers, dealers said.
On an annualised basis, the premium on the one-year, exact-period dollar/rupee contract was at 4.54%, compared with 4.50% on Friday. The premium was at 338.42 paise compared with 337.97 paise on Friday.
OUTLOOK
On Tuesday, the rupee may take opening cues from overnight movement in the dollar and prices of Brent crude oil, dealers said.
Domestic traders are expected to refrain from placing fresh bets ahead of India’s Budget for 2022-23 (Apr-Mar), to be presented by Finance Minister Nirmala Sitharaman on Tuesday.
During the day, the rupee is seen at 74.6000-75.2000 a dollar.
India Rupee – World FX: Most rise; yen down on weak Japan econ data
MUMBAI – Major currencies rose against the dollar today because the dollar index retreated in European trade as investors were cautious ahead of monetary policy decisions by several central banks this week.
At 1457 IST, the dollar index, which measures the strength in the US currency against a basket of six major currencies, was at 97.05, against 97.22 on Friday. It was at 97.26 on Thursday.
The Reserve Bank of Australia is expected to announce the end of its quantitative easing programme when it details its policy decision on Tuesday.
The Bank of England is set to meet on Thursday, with economists predicting a second rate hike in less than two months, as the central bank reverses more pandemic stimulus, after inflation jumped to its highest in nearly 30 years.
The European Central Bank also has its policy meeting on Thursday, though no changes in monetary policy are expected.
Meanwhile, the Japanese yen fell nearly 0.2% against the dollar today after Japan’s consumer confidence fell in January for the second consecutive month due to the rapid spread of the Omicron variant of coronavirus.
A Cabinet Office survey showed the sentiment index for general households, which includes views on incomes and jobs, was at 36.7 in January, down from 39.1 in December.
Today, commodity-linked currencies such as the Australian and New Zealand dollars rose 0.9% and 0.6% against the US dollar, respectively. (Arushi Jain)
India Rupee: Rises sharply on FX, IPO inflows; dlr index retreats
NEW DELHI – The rupee rose sharply against the dollar today because some private and foreign banks persistently sold the US unit for foreign fund inflows into Bharti Airtel Ltd, said dealers.
Bharti Airtel on Friday announced that Alphabet Inc will invest up to $1 bln in the telecom major as part of its Google for India Digitization Fund.
Dealers said some banks sold dollars also for overseas investment into Adani Wilmar’s initial public offering. The three-day offer opened for public subscription on Thursday, and the company aims to raise up to 36 bln rupees.
Further, some banks sold dollars after stop losses got triggered near 74.75-74.80 a dollar levels, which also aided the Indian unit, according to some dealers.
A surge in domestic equity indices also supported sentiment for the Indian unit, said dealers. At 1440 IST, the Nifty 50 and Sensex were nearly 1.8% higher each.
Meanwhile, the dollar index came off earlier highs and edged lower in European trade as investors stayed cautious ahead of monetary policy decisions of several key central banks this week. This also supported sentiment for the rupee, said dealers.
At 1440 IST, the dollar index, which measures the strength in the US currency against a basket of six major currencies, was at 97.06, against 97.22 on Friday. It was at 97.26 on Thursday.
The rupee is seen at 74.6000-75.0000 a dollar during the day. (Arushi Jain and Pratiksha)
India Rupee: Up on Adani Wilmar’s IPO inflow; oil cos’ dlr buys weigh
NEW DELHI – The rupee rose against the dollar today as some private banks stepped in to sell the greenback for overseas investments into Adani Wilmar’s initial public offering, according to dealers.
The three-day IPO of Adani Wilmar will close for public subscription today. The company aims to raise up to 36 bln rupees.
Moreover, sentiment for the Indian unit was also supported due to a surge in domestic and Asian share indices, said dealers.
At 1042 IST, the Nifty 50 and Sensex were nearly 1.3% higher each.
Meanwhile, dealers said gains in the Indian rupee were limited because some banks purchased dollars on behalf of oil marketing companies, noting elevated Brent crude oil prices.
Crude prices rose for the sixth week and breached the $91-per-barrel mark amid concern about tight supply and geopolitical tensions in Eastern Europe and West Asia, said dealers.
At 1042 IST, the March contract of Brent crude was at $91.09 per bbl on the Intercontinental Exchange compared with the previous close of $90.03 per bbl. Prices had risen to $91.70 a bbl on Friday.
Dollar remained near an 18-month high against other major currencies amid investors’ expectation of aggressive rate hikes in the US this year, which also weighed on sentiment for the Indian rupee, dealers said.
At 1042 IST, the dollar index, which measures the strength in the US currency against a basket of six major currencies, was at 97.14, against 97.22 on Friday. It was at 97.26 on Thursday.
The rupee is seen in a range of 74.8000-75.2000 a dollar during the day. (Arushi Jain)
India Rupee: Expected range for rupee – Jan 31
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:
End
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Aditya Sakorkar
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