Informist, Tuesday, Feb 8, 2022
By Pratiksha and Arushi Jain
NEW DELHI – The rupee reversed the early trade gains and ended lower against the dollar today as the greenback strengthened in the European trade. Noting this, some state-owned and foreign banks placed fresh bets in favour of the dollar, said dealers.
After moving in a range of 23 paise through the day, the rupee settled at 74.7475 a dollar, against 74.6950 a dollar on Friday. Domestic currency markets were closed on Monday to mourn the death of legendary Indian singer Lata Mangeshkar.
The dollar index rose sharply today as investors worldwide braced up for aggressive monetary policy normalisation by the US Federal Reserve on the back of higher-than-expected US jobs data released on Friday, said dealers.
The US Labor Department stated the economy added 476,000 jobs in January. Economists surveyed by Dow Jones had expected an increase of just 150,000 jobs, with some on the Wall Street projecting net jobs losses for the given month.
At 1620 IST, the dollar index, which measures the strength in the US currency against a basket of six major currencies, was at 95.60, compared with 95.40 on Monday. It was at 95.48 on Friday.
The dollar index rose to as much as 95.75 earlier today.
Sentiment for the Indian unit was further dampened as some banks stepped in to purchase the greenback after stop losses were triggered near 74.70 a dollar levels, dealers said.
“Initially, we saw some depreciation in the rupee because of strength in the dollar index but after stop losses were hit at 74.70/$1 level, it (rupee) moved towards the 74.80/$1 mark easily,” said a dealer with a state-owned bank.
Some dealers said banks also purchased dollars on behalf of oil marketing companies, noting elevated Brent crude oil prices, a move that dampened sentiment for the local unit.
Even though prices of Brent crude oil came off earlier highs, they moved near the $91-per-barrel mark ahead of the resumption of talks between the US and Iran that may revive a nuclear deal that could lead to the removal of sanctions on Iranian oil sales, increasing global supplies.
At 1620 IST, the April contract of Brent crude oil was at $90.69 per bbl on the Intercontinental Exchange, compared with the previous close of $92.69 per bbl. It had risen to $94.00 a bbl on Monday.
Due to these persistent dollar purchases, the local unit fell to the day’s low of 74.7950 a dollar today.
Meanwhile, during early trade today, some foreign banks sold dollars for deliverables accumulated in their Nostro accounts after Monday’s trading holiday in India, that provided some support to the rupee, said dealers.
A rise in local benchmark indices also limited a sharp losses in the Indian currency, said dealers. Both the Nifty 50 and the Sensex closed over 0.3% higher.
The local unit had earlier risen to the day’s high of 74.5650 a dollar today.
Market participants worldwide now await release of the US inflation data for January, due on Thursday, for cues on policy tightening plans by the Federal Reserve, said dealers.
According to reports, inflation in the world’s largest economy is expected to have touched a four-decade high of 7.3% in January.
Domestic investors are also closely monitoring the three-day meeting of the Reserve Bank of India’s monetary policy committee, set to conclude on Thursday.
Economists believe that the central bank will start the process of normalisation of the accommodative monetary policy by increasing the reverse repo rate in the upcoming policy meeting.
FORWARDS
Premium on the dollar/rupee forwards contract fell today due to dollar sales by banks on behalf of exporters, dealers said.
On an annualised basis, the premium on the one-year, exact-period dollar/rupee contract was at 4.43%, compared with 4.48% on Friday. The premium was at 331.33 paise compared with 334.63 paise on Friday.
OUTLOOK
On Wednesday, the rupee may take opening cues from overnight movement in the dollar index and prices of Brent crude oil, said dealers.
“I think the rupee will remain in a tight range of 74.60/$1-74.90/$1 tomorrow as traders may remain cautious ahead of RBI’s policy meeting,” said a dealer with a state-owned bank. “However, if it (rupee) breaks the 74.90/$1 mark, we may see more depreciation.”
Dealers have now pegged key technical support for the rupee at 74.90 a dollar.
During the day, the rupee is seen in a range of 74.6000-74.9000 a dollar.
India Rupee – World FX: Euro down on ECB Lagarde’s dovish comments
MUMBAI – The euro fell nearly 0.3% against the dollar today after European Central Bank President Christine Lagarde on Monday said there was no need for aggressive monetary policy tightening in the euro zone, as inflation levels were expected to fall back and stabilise around the central bank’s target of 2%.
Last week, the ECB had hinted at an interest rate hike later this year, and said it would decide on winding down its pandemic-induced bond-buying scheme at its policy meeting in March.
The dollar index rose sharply in European trade today, as investors worldwide braced for aggressive monetary policy normalisation by the US Federal Reserve after data on Friday showed a steeper-than-expected addition to employment numbers in the US.
The US Labor Department stated that the economy added 476,000 jobs in January. Economists surveyed by Dow Jones had expected an increase of only 150,000 jobs, with some on the Wall Street projecting net jobs losses for the month.
At 1500 IST, the dollar index, which measures the strength in the US currency against a basket of six major currencies, was at 95.65, against 95.40 on Monday and 95.48 on Friday. It rose to around 95.75 earlier today.
Commodity-linked currencies such as the Australian and New Zealand dollars rose nearly 0.1% each against the dollar today. (Arushi Jain)
India Rupee: Falls as dlr rises, stop losses triggered near 74.70/$1
NEW DELHI – The rupee erased all earlier gains and fell against the dollar in intraday trade today because the US currency strengthened further globally, and noting this some state-owned and foreign banks placed fresh bets in favour of the dollar, said dealers.
The dollar index remained sharply up as investors worldwide braced for aggressive monetary policy normalisation by the US Federal Reserve on the back of higher-than-expected US jobs data released on Friday, said dealers.
The US Labor Department stated the economy added 476,000 jobs in January. Economists surveyed by Dow Jones had expected an increase of just 150,000 jobs, with some on the Wall Street projecting net jobs losses for the given month.
At 1340 IST, the dollar index, which measures the strength in the US currency against a basket of six major currencies, was at 95.72, against 95.40 on Monday. It was at 95.48 on Friday.
The Indian unit slumped further as some banks stepped in to purchase the greenback after stop losses were triggered near 74.70 a dollar levels, dealers said.
Some dealers said banks purchased dollars also on behalf of oil importers at elevated Brent crude prices near $92 per barrel, which also dampened sentiment for the local unit.
At 1340 IST, the April contract of Brent crude was at $92.02 per bbl on the Intercontinental Exchange compared with the previous close of $92.69 per bbl. It had risen to $94.00 a bbl on Monday.
The rupee is seen in a range of 74.6000-74.9000 a dollar for the rest of the day. (Arushi Jain and Pratiksha)
India Rupee: Rises on Nostro inflows; weak local equities weigh
MUMBAI – The rupee rose against the dollar today because some foreign banks stepped in to sell dollars, likely for deliverables accumulated in their Nostro accounts after Monday’s trading holiday in India, said dealers.
Domestic currency markets were closed on Monday after the death of legendary Indian singer Lata Mangeshkar on Sunday.
However, a sharp fall in domestic equity indices limited further gains in the local unit, said dealers. At 1035 IST, the Nifty 50 and Sensex were nearly 0.6% lower each.
Rise in the dollar index, after data released on Friday showed the US created higher-than-expected jobs, also weighed on the sentiment for the local currency, according to dealers.
At 1035 IST, the dollar index, which measures the strength in the US currency against a basket of six major currencies, was at 95.51, against 95.40 on Monday. It was at 95.48 on Friday.
The US Labor Department stated the economy added 476,000 jobs in January. Economists surveyed by Dow Jones expected an increase of just 150,000 jobs, with some on the Wall Street projecting net jobs losses for the given month.
Upbeat jobs data in the US led investors to expect that the Federal Reserve may hike interest rates at the March policy meeting, said dealers.
Investors worldwide now await US inflation data for January, due on Thursday, which is reportedly expected to have climbed to a four-decade high of 7.3% in January.
Dealers have pegged immediate key technical resistance for the rupee at 74.5000 a dollar.
During the day, the rupee is seen in a range of 74.5000-74.8000 a dollar. (Arushi Jain)
India Rupee – Asia FX: Most units up as Asian shrs rise; US CPI eyed
NEW DELHI – Most Asian currencies were up against the dollar in early trade today due to a rise in Asian equity indices, amid gains in US stock futures.
However, gains in Asian currencies were limited as investors worldwide stayed cautious ahead of the US inflation data for January, scheduled to be released on Thursday.
The key data point could inject more volatility into financial markets bracing for aggressive monetary policy normalisation by the US Federal Reserve.
According to reports, inflation in the world’s largest economy is expected to have climbed to a four-decade high of 7.3% in January.
At 1016 IST, the dollar index, which measures strength in the US currency against a basket of six major currencies, was at 95.51, against 95.40 on Monday. It was at 95.48 on Friday.
Today, the Indonesian rupiah was up 0.1% against the greenback ahead of the Bank Indonesia’s monetary policy outcome on Thursday.
The South Korean won and Thai baht were up nearly 0.3% and 0.1% against the dollar, respectively. However, the Malaysian ringgit fell nearly 0.1% against the dollar. (Pratiksha)
India Rupee: Expected range for rupee – Feb 8
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)
End
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Deepshikha Bhardwaj
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