Informist, Monday, Jul 17, 2023
By Kabir Sharma
MUMBAI – The rupee ended higher against the dollar today as banks sold the greenback for foreign fund inflows into domestic equities, dealers said.
“There were inflows today from FIIs (foreign institutional investors). Some talk of yuan was also there after data from China, but then inflows kept pulling it (USD/INR) down,” a dealer with a foreign bank said.
After moving in a range of 17 paise throughout the day, the rupee settled at 82.0400 a dollar, against Friday’s close of 82.1650 a dollar.
The rupee opened higher against the dollar today, noting a fall in crude oil prices, dealers said. Brent crude oil prices remained below the $80-per-barrel mark after Libya resumed production over the weekend. Two of the three Libyan oilfields – the Sharara and El Feel oilfields – with total production capacity of 370,000 bbl per day, resumed production on Saturday evening after being shut on Thursday, according to reports.
A fall in crude oil prices lowers India’s import bill, which supports the currency.
However, a sharp fall in the offshore Chinese yuan limited gains in the Indian unit in early trade. The offshore Chinese yuan fell 0.4% against the greenback after China’s GDP data came in weaker than expected. The fall in the yuan weighed on Asian currencies, including the rupee.
China, the world’s second-largest economy, today reported that its GDP grew 6.3% on year in Apr-Jun, lower than expected. According to a poll by Reuters, China’s economy was expected to have grown 7.3% on year in Apr-Jun, up from 4.5% in Jan-Mar.
Some banks sold dollars on behalf of exporters and for foreign fund inflows into domestic equities, which supported the Indian unit, dealers said. Today, the Nifty 50 and the Sensex ended 0.8% higher each.
The dollar index remained near the 15-month low levels it had hit last week after the release of softer-than-expected inflation data in the US.
Market participants await the release of data on US retail sales and industrial production, due on Tuesday.
FORWARDS
Premiums on dollar/rupee one-year forward contracts fell as exporters sold dollars for forward delivery, noting relatively higher levels, dealers said.
Premiums rose to a high of 1.74% during the day, tracking an intraday fall in US Treasury yields, dealers said. Premiums on forwards of a currency pair are reflective of the interest rate differential between the two countries.
“Premiums are actively tracking US yields. Exporters are finding above 1.70% levels attractive for now,” said a dealer with a private bank.
The premium on the one-year dollar/rupee contract was 140.88 paise, against 142.61 paise on Friday. On an annualised basis, the premium was at 1.71%, against the previous close of 1.73%.
OUTLOOK
On Tuesday, the rupee will take cues from movement in the dollar index and crude oil prices, dealers said.
“Rupee is expected to remain in an appreciating trend as in-flows dominate and outpace outflows within a range of 81.90 to 82.30 However, a close watch is required at 81.90, wherein RBI may step in to check the pace of appreciation apart from oil prices which are rising and Chinese Yuan,” said Anil Kumar Bhansali, head of treasury and executive director, Finrex Treasury Advisors LLP.
Dealers peg immediate key technical support for the rupee at 82.30 a dollar. During the day, the rupee is seen in the range of 81.80-82.30 a dollar.
India Rupee – World FX: Euro up ahead of Eurozone CPI data release
NEW DELHI – The euro rose 0.1% against the dollar today as traders await for the eurozone CPI data for June, which is scheduled for release on Wednesday.
The Japanese yen rose 0.3% against the greenback as investors braced themselves for the Bank of Japan’s monetary policy decision next week.
The dollar fell against the major peers today, tracking rise in the euro and the Japanese yen.
At 1512 IST, the dollar index, which measures the strength in the greenback against a basket of six major currencies, was at 99.86 as against 99.96 on Friday. It was at 99.76 on Thursday.
Meanwhile, the Australian dollar shed 0.4% against the dollar, tracking sharp losses on the offshore Chinese yuan after China reported less-than-expected economic growth in the second quarter. China is Australia’s largest trading partner, accounting for 30% of Australian goods and service exports. (Ananya Chaudhuri)
India Rupee:In thin band amid low volume on lack of significant cues
India Rupee: In thin band amid low volume on lack of significant cues
NEW DELHI – The rupee moved in a narrow range against the dollar today amid low volumes due to the lack of significant cues, dealers said.
So far today, the rupee has moved in a tight range of 9 paise against the dollar.
Dealers said banks sold dollars on behalf of exporters and this supported the Indian unit. “They (exporters) are selling around the 82.18-82.20 (a dollar) level because the overall view is (that the) dollar is getting weaker; they might be expecting INR (Indian rupee) to appreciate in the near term,” a dealer at a big state-owned bank said.
Moreover, a rise in local share indices also supported the Indian currency, dealers said. At 1259 IST, both the Nifty 50 and Sensex were up 0.4%.
However, a decline in the offshore Chinese yuan limited the gains for the local unit, dealers said. The Chinese yuan fell 0.4% against the dollar today as China’s economy grew 6.3% on year in Apr-Jun, lower than the 7.3% projected by a Reuters poll.
Dealers peg the immediate key technical support for the rupee at 82.30 a dollar. During the rest of the day, the rupee is seen in a range of 81.90-82.30 a dollar. (Ananya Chaudhuri)
India Rupee: Pares gains as Chinese yuan falls on weak econ data
NEW DELHI – The rupee erased its opening gains against the dollar today as the offshore Chinese yuan fell sharply after weak economic data from China, dealers said.
China, the world’s second-largest economy, today reported that its GDP for Apr-Jun grew 6.3% on year, which was lower than expected. A Reuters poll had expected China’s economy to have grown 7.3% on year in Apr-Jun, up from 4.5% in Jan-Mar.
Post the data, the offshore Chinese yuan fell 0.4% against the greenback, which weighed on Asian currencies, including the rupee.
However, a fall in the prices of crude oil supported the Indian unit, dealers said. Crude oil prices fell after Libya resumed production over the weekend. Of the three Libyan oilfields which were shut on Thursday, two–the Sharara and El Feel oilfields with a total production capacity of 370,000 bbl per day–resumed production on Saturday evening, according to reports.
A fall in crude oil prices lowers India’s import bill, which subsequently supports the currency.
At 0941 IST, the September contract of Brent crude oil on the Intercontinental Exchange was at $79.17 a bbl as against $79.87 a bbl on Friday. It was at $81.36 a bbl on Thursday. Prices fell to as low as $79.02 a bbl earlier today.
“The market is looking for some fresh cues from the US. For now, 82.30 (a dollar) seems supported,” a dealer with a state-owned bank said.
Dealers peg the immediate key technical support for the rupee at 82.20 a dollar. During the rest of the day, the rupee is seen in a range of 81.90-82.30 a dollar. (Pratiksha)
India Rupee – Asia FX: Yuan falls as China GDP misses expectation
NEW DELHI – The Chinese yuan fell 0.4% against the dollar today after data showed China’s GDP grew less than expected in Apr-Jun as both domestic and international demand declined.
Data from the National Bureau of Statistics showed China’s economy grew 6.3% on year in Apr-Jun compared to 7.3% projected by a Reuters’ poll. However, the pace of growth on an annualised basis was the quickest since second quarter of 2021.
The decline in the offshore Chinese yuan dragged down all other Asian currencies against the greenback. Most of the Asian countries share deep trade ties with China.
The Malaysian ringgit fell 0.7% against the dollar, and was the worst performing currency among its Asian peers. All the other currencies fell 0.1-0.7% against the US unit. (Ananya Chaudhuri)
India Rupee: Expected range for rupee – Jul 17
NEW DELHI – Following are the expected support and resistance levels for the rupee today, 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 Avishek Dutta
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