Informist, Monday, Sep 4, 2023
By Ananya Chaudhuri
MUMBAI – The rupee ended a tad lower against the dollar today as banks persistently bought the US unit on behalf of oil marketing companies, dealers said, despite greenback sales by lenders on account of foreign fund inflows.
Today, after rising to a high of 82.6675, the Indian currency settled at 82.7475 against the US currency, compared to 82.7075 a dollar on Friday.
The rupee started the day largely steady against the US unit at 82.6800 as traders assessed the mixed US jobs data for August. Data from the US labor department showed the number of new jobs added rose by 187,000 in August against the expectation of 170,000 new jobs for the month, indicating resilience in the labour market in the face of high interest rates.
However, the unemployment rate rose to 3.8% and wage growth moderated, which suggested a softening of the labour market conditions and reinforcing expectations that the Fed may not go for another interest rate hike. Data for July was revised lower to 157,000 from 187,000 reported earlier.
Following the mixed US jobs data for August, the dollar index rose breaching a psychologically-crucial level of 104.00 on Friday which also exerted pressure on the Indian unit. At 1639 IST, the dollar index, which measures the strength in the greenback against a basket of six major currencies, was at 104.05 as against 104.24 on Friday. It was at 103.2 on Thursday. The index rose as much as 104.29 on Friday.
“We were hoping it (rupee) should go down further, but maybe because the US market is closed today, so the dollar demand is less,” a dealer at a state-owned bank said. “Tomorrow, we’re expecting it (rupee) to go down.”
Financial markets in the US are shut today on account of Labor Day.
Shortly after opening, the Indian currency fell to the day’s low of 82.7750 against the greenback as banks rushed to buy dollars on behalf of oil marketing companies which expected the oil prices may rise further from here on, dealers said.
Crude oil prices rose to their highest level in more than seven months due to supply concerns as analysts expect Saudi Arabia to extend a voluntary oil production cut of 1 mln barrels per day into October, adding to cuts put in place by the Organization of the Petroleum Exporting Countries and its allies.
A rise in crude oil prices increases India’s import bill, which subsequently weighs on the Indian currency.
At 1639 IST, the October contract of Brent crude oil on the Intercontinental Exchange was at $88.63 a bbl as against $88.55 a bbl on Friday. It was at $86.83 per bbl on Thursday.
However, the rupee started to erase losses and rose to the day’s high of 82.6675 against the dollar as banks stepped in to sell dollars on account of foreign fund inflows to domestic equities, dealers said.
A rise in domestic share indices supported the Indian unit, dealers said. Today, the Nifty 50 and the Sensex ended 0.5% and 0.4% higher, respectively.
“There’s some selling (of dollars), obviously volumes are low considering it’s a US holiday so those (dollar) buys aren’t there,” a dealer at a private bank said. “So, the move seems to be slightly exaggerated.”
Majority of the session, the local unit was in a tight range of 11 paise against the dollar amid low volume as US financial markets are closed today.
FORWARDS
Premiums on the one-year dollar/rupee forwards ended largely steady on lack of significant triggers, dealers said.
US Treasury yields rose Friday following mixed US jobs data which showed the world’s largest economy added more jobs than expected, but unemployment rate rose in contrast to consensus view of it remaining unchanged. This weighed on the forward premiums.
Financial markets in the US are shut today on account of Labor Day.
Premiums on forwards of a currency pair are reflective of the interest rate differential between two countries.
The premium on the one-year dollar/rupee contract was 137.86 paise, against 137.45 paise on Friday. On an annualised basis, the premium was at 1.66%, against the previous close of 1.66%.
OUTLOOK
On Tuesday, the rupee will take cues from the dollar index and crude oil prices, dealers said. The Indian currency may also track the offshore yuan, they said.
Dealers said banks may step in to buy dollars for oil marketing companies which may weigh on rupee.
Dealers have pegged key technical support for the rupee at 82.80 a dollar. During the day, the rupee is seen in the range of 82.40-82.90 a dollar.
India Rupee – World FX: Dollar index falls post mixed US jobs data
NEW DELHI – The dollar index edged lower today as traders continued to assess mixed US jobs report released on Friday and its possible impact on the US Federal Reserve’s interest rate decision this month. Financial markets in the US are shut today on account of Labor Day.
Data from the US Labor Department showed the number of new jobs rose by 187,000 in August against an expectation of 170,000 new jobs for the month. However, data for July was revised down to 157,000 from 187,000 reported earlier. On the other hand, the unemployment rate rose to 3.8% and wage growth moderated.
Fed fund futures traders are now pricing in a 93% likelihood of a pause this month, according to the CME’s FedWatch tool.
At 1625 IST, the dollar index, which measures the strength of the greenback against a basket of six major currencies, was at 104.05 as against 104.24 on Friday. It was at 103.20 on Thursday.
The euro rose 0.1% against the greenback ahead of a speech by European Central Bank President Christine Lagarde later today. Her comments will be watched carefully for clues ahead of the central bank’s policy-setting meeting this month.
The Australian dollar jumped 0.2% ahead of the Reserve Bank of Australia’s policy meeting on Tuesday where it is expected to stand pat on interest rates. A Reuters poll showed that all but two of 36 economists said that Reserve Bank of Australia would hold its official cash rate at 4.10% on Tuesday. (Pratiksha)
India Rupee: Erases losses as banks sell dollar for FX inflows
MUMBAI – The rupee erased earlier losses against the dollar as banks sold the greenback for foreign fund inflows into domestic equities, dealers said.
“There was some bulk deal today which was pushing it (dollar/rupee) down, overall volumes are low, only some oil buying (of dollars) is there,” a dealer with a big state-owned bank said.
A rise in domestic share indices supported the Indian unit, dealers said. At 1308 IST, the Nifty 50 and the Sensex were up 0.4% and 0.3%, respectively.
Volumes in the currency market are low today due to a holiday in the US. Financial markets in the US are shut today on account of Labor Day.
Some banks bought the greenback on behalf of oil marketing companies which weighed on the Indian unit, dealers said. Oil companies bought the commodity fearing further appreciation in prices.
Crude oil prices rose to their highest level in more than seven months on Friday due to supply concerns as analysts expect Saudi Arabia to extend a voluntary oil production cut of 1 mln barrel per day into October.
A rise in crude oil prices increases India’s import bill, which subsequently weighs on the Indian currency.
At 1317 IST, the October contract of Brent crude oil on the Intercontinental Exchange was at $88.50 a barrel as against $88.55 a bbl on Friday. It was at $86.83 per bbl on Thursday.
Dealers see the key technical support for the rupee at 82.90 a dollar. During the day, the rupee is seen in the range of 82.60-82.90 a dollar. (Kabir Sharma)
India Rupee: Down on rise in crude prices, bks’ dlr buys for oil cos
MUMBAI – The rupee fell against the dollar as banks rushed to purchase the greenback on behalf of oil marketing companies who expected crude oil prices to rise further, dealers said.
Crude oil prices rose to their highest level in more than seven months due to supply concerns as analysts expect Saudi Arabia to extend a voluntary oil production cut of 1 mln barrel per day into October.
A rise in crude oil prices increases India’s import bill, which subsequently weighs on the Indian currency.
At 0933 IST, the October contract of Brent crude oil on the Intercontinental Exchange was at $88.59 a barrel as against $88.55 a bbl on Friday. It was at $86.83 per bbl on Thursday.
“Little bit of (dollar) buying is there, so it (rupee) has gone down from opening levels,” a dealer at a state-owned bank said. “We’re expecting the range to be anywhere between 82.60 and 83.00(a dollar) today.”
Moreover, the dollar index rose beyond the psychologically crucial level of 104.00 level after data from the US Labor Department showed Friday the number of new jobs rose by 187,000 in August against the expectation of 170,000 new jobs for the month. This exerted pressure on the rupee, dealers said.
At 0934 IST, the dollar index, which measures the strength in the greenback against a basket of six major currencies, was at 104.17 as against 104.24 on Friday. It was at 103.2 on Thursday. The index rose as much as 104.29 on Friday.
However, gains on local share indices supported the Indian currency, dealers said. At 0934 IST, both the Nifty 50 and Sensex were up 0.3%
Dealers see the key technical support for the rupee at 82.90 a dollar. During the day, the rupee is seen in the range of 82.60-82.90 a dollar. (Ananya Chaudhuri)
India Rupee – Asia FX: Down as dlr surges post mixed US jobs data
MUMBAI – Most Asian currencies were down against the dollar as the greenback surged after the release of US non-farm payrolls data on Friday.
US Labor Department data showed that non-farm payrolls increased by 187,000 jobs last month after rising by 157,000 in July. Economists polled by Reuters had forecast payrolls to increase by 170,000. However, the unemployment rate rose to 3.8% in August from 3.5% in July, and wage growth moderated, suggesting softening of labour market conditions in the country.
The data strengthened expectations that the Federal Reserve may not hike rates at its meeting this month. Consequently, financial markets are now pricing in a 93% likelihood of a pause this month, according to the CME’s FedWatch tool.
At 0922 IST, the dollar index, which measures the strength of the greenback against a basket of six major currencies, was at 104.18 as against 104.24 on Friday. It was at 103.20 on Thursday.
Moreover, traders await key data releases from Australia and China, due later this week. Australia’s central bank will announce its policy decision on Tuesday, while China is set to announce its August trade numbers on Thursday and inflation data on Saturday.
The Malaysian ringgit was down 0.2% against the dollar. The Taiwan dollar and the Thai baht were both down 0.1% each against the greenback.
Bucking the trend, the Australain dollar was up 0.2% against the dollar ahead of the Reserve Bank of Australia’s policy outcome on Tuesday. (Kabir Sharma)
India Rupee: Expected range for rupee – Sep 4
MUMBAI – Following are the expected support and resistance levels for the rupee today, as forecasted by leading banks and brokerages in an Informist poll:
(Ananya Chaudhuri)
End
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Aditya Sakorkar
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