Informist, Tuesday, May 24, 2022
By Pratiksha and Srijonee Bhattacharjee
NEW DELHI/MUMBAI – The rupee ended lower against the dollar today, but managed to erase a significant portion of its intraday losses due to sales of the greenback by the Reserve Bank of India in the last leg of trade, dealers said.
After falling to the day’s low of 77.6725 a dollar, the Indian unit settled at 77.5825 a dollar today.
The rupee opened slightly weaker at 77.5600 a dollar, as against 77.5150 a dollar on Monday, due to a fall in domestic and Asian share indices, which slipped tracking losses in the US stock futures, dealers said.
US stock futures fell due to concern about an economic slowdown even as China promised more measures to boost economic growth. The Nifty 50 and Sensex ended 0.6% and 0.4% lower, respectively.
The rupee then fell further to 77.63 a dollar as some state-owned banks stepped in to purchase dollars on behalf of oil marketing companies, dealers said.
It then traded in a narrow range of 77.58-77.64 a dollar for a duration of almost three hours, following which it fell to the day’s low of 77.6725 a dollar as oil importers stepped up their greenback purchases.
“Buying (of dollars) for oil importers was there in the market as soon as it opened,” a dealer with a state-owned bank said. “We saw more buying today as compared to the past few sessions.”
Some dealers said the Indian unit was also weighed by some banks’ dollar buying ahead of daily reference rate fixing.
“The overall sentiment around rupee was in contrast to yesterday’s (Monday). Importers’ interest was seen on any lower move in the USD-INR pair,” a dealer with a private bank said. “If these levels sustain we might see this sentiment persisting.”
Meanwhile, the dollar index touched a fresh near one-month low during European trade, which restricted losses for the Indian unit, dealers said.
The index, which measures the strength in the US currency against a basket of six major currencies, fell to 101.74 today, its lowest level since April 26.
The index fell as the euro gained after European Central Bank President Christine Lagarde chose not to rule out a 50-basis-point interest rate hike at the bank’s July meeting.
At 1629 IST, the dollar index was at 101.98 compared with 102.08 on Monday. It was at 103.03 on Friday.
However, during the last 15 minutes of trade, the rupee erased almost 10 paise of losses and closed at 77.5825 a dollar. Dealers said that the Reserve Bank of India intervened through greenback sales at the last moment to prevent the rupee from breaching the support level of 77.70 a dollar.
FORWARDS
Premiums on dollar/rupee forwards were down slightly because some companies sold the greenback for forward delivery, dealers said.
Premiums on the 1-year, exact-period, dollar/rupee forwards contract was at 302.50 paise as against 305.62 paise at the previous close. On annualised terms, the premium was at 3.90% as against 3.94% on Monday.
Dealers said that there was very little activity in the market today in the absence of significant triggers.
OUTLOOK
On Wednesday, the rupee will take cues from overnight movement in the dollar index and Brent crude oil prices, dealers said.
“If the rupee sustains the 77.50-77.55 (a dollar) levels for some time, its further movement towards the 77.20 (a dollar) can be expected. We can only predict a further direction for the rupee from there,” a dealer with a private bank said.
Dealers have now pegged strong key technical support for the rupee at 77.70 a dollar.
During the day, the rupee is seen in the range of 77.30-77.70 a dollar.
India Rupee: Remains down on oil cos’ persistent dollar purchases
NEW DELHI – The rupee remained down against the dollar as some state-owned banks persistently purchased the greenback on behalf of oil marketing companies, dealers said.
Prices of crude oil edged lower today as investors’ concerns about a possible recession and weaker consumption persisted.
At 1420 IST, the July contract of Brent crude oil on the Intercontinental Exchange was at $113.22 a bbl against the previous close of $113.42 a bbl.
Meanwhile, the dollar index touched a near one-month low during European trade, which restricted losses for the Indian unit, dealers said.
The index, which measures the strength in the US currency against a basket of six major currencies, fell to 101.74 today, its lowest level since April 26.
The index fell as the Euro gained after European Central Bank President Christine Lagarde chose not to rule out a 50-basis-point interest rate hike at the bank’s July meeting.
At 1420 IST, the dollar index was at 102.01 compared with 102.08 on Monday. It was at 103.03 on Friday.
Dealers have now pegged key technical support for the rupee at 77.70 a dollar.
For the rest of the day, the Indian unit is seen at 77.3000-77.7000 a dollar. (Pratiksha)
India Rupee: Falls as domestic shrs down; weak dlr index limits fall
NEW DELHI – The rupee fell slightly against the greenback today as domestic and Asian share indices slipped tracking losses in US stock futures, dealers said.
US stock futures fell due to concern over an economic slowdown even as China promised more measures to boost economic growth.
At 0935 IST, both the Nifty 50 and the Sensex fell 0.1% each.
The dollar index hovered near a one-month low hit on Monday as investors cut bets on a further rise in the dollar due to increasing interest rates in the US and were optimistic that easing lockdowns in China could aid global growth. This restricted losses in the Indian unit, dealers said.
At 0935 IST, the dollar index was at 102.22 compared with 102.08 on Monday. It was at 103.03 on Friday.
“The overall trend looks positive for the rupee as of now. If the upward 77.47 (a dollar) breaches, we might see it (rupee) moving towards the 77.20 (a dollar) level,” a dealer with a state-owned bank said.
Dealers have now pegged key technical support for the rupee at 77.70 a dollar.
Market participants are now keeping an eye on the US Federal Open Market Committee meeting minutes scheduled for release on Wednesday. The minutes of the most recent Federal Reserve rate-setting meeting will provide clues about the US central bank’s policy tightening route.
For the rest of the day, the Indian unit is seen at 77.3000-77.7000 a dollar. (Pratiksha)
India Rupee – Asia FX: Most units down tracking weak local equities
MUMBAI – Most Asian currencies were down against the greenback today as Asian share indices fell in early trade tracking losses in the US stock futures.
Equities slipped today amid persistent worries over higher costs of borrowing, and soaring fuel and materials prices.
Geopolitical issues are also being closely monitored after comments by US President Joe Biden on Taiwan threatened to raise tensions with Beijing.
Market participants are now keeping an eye on the minutes of the US Federal Open Market Committee’s meeting which are scheduled for release on Wednesday. The minutes of the most recent Federal Reserve rate-setting meeting will provide clues about the US central bank’s policy tightening route
The Indonesian rupiah was up 0.2% against the greenback ahead of Bank Indonesia’s policy meeting later today. (Richard Fargose)
India Rupee: Expected range for rupee – May 24
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 Akul Nishant Akhoury
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