Informist, Tuesday, Feb 15, 2022
By Pratiksha
NEW DELHI – The rupee recovered early losses and ended sharply higher against the dollar today because of improvement in risk sentiment following reports that some Russian troops around areas near Ukraine have started returning to their bases, said dealers.
“The rupee saw a sharp upward movement as soon as news of Russian troops returning (from Ukraine) hit the market,” said a dealer with a state-owned bank.
After moving in a range of 39 paise through the day, the rupee settled at 75.3300 a dollar, snapping a five-day losing streak. It had closed at 75.6050 a dollar at 1530 IST on Monday.
Russia’s defence ministry today said it was pulling back some of its forces deployed near the Ukrainian border after completing drills. This is the first major step that Russia has taken to de-escalate the geopolitical tensions that had built up over the last few weeks in the region.
“Units of the Southern and Western military districts, having completed their tasks, have already begun loading onto rail and road transport and today they will begin moving to their military garrisons,” Russian defence ministry chief spokesman said.
The US and other western countries had asked citizens to leave Ukraine on fears of an invasion after Russia amassed over 100,000 troops near Ukraine’s borders.
A surge in domestic share indices also supported the Indian currency, dealers said. Both the Nifty 50 and Sensex closed nearly 3.1% higher each.
The dollar index also came off its high after Russia-Ukraine tensions eased, noting which some banks cut their existing bets in favour of the dollar, dealers said. This also supported sentiment for the Indian unit.
At 1627 IST, the dollar index, which measures the strength of the US currency against a basket of six major currencies, was at 96.05, against 96.37 on Monday. It was at 96.03 on Friday.
The index fell to as much as 95.98 earlier today.
The dollar had surged against other major currencies on Monday due to the Russia-Ukraine standoff and after St. Louis Federal Reserve President James Bullard reiterated calls for faster interest rate hikes by the US Fed.
Prices of crude oil also came off the seven-year high to $94 per barrel, as tension between Russia and Ukraine seemed to ease.
At 1627 IST, the April contract of Brent crude was at $93.86 per bbl on the Intercontinental Exchange, against the previous close of $96.48 per bbl.
This supported the rupee further and it rose to a high of 75.3200 a dollar.
Early in the trade, crude oil prices had risen close to $96 a bbl, which prompted oil marketing companies to purchase dollars through some state-owned banks, which weighed on the sentiment for the Indian unit and it touched a low of 75.7100 a dollar.
Market participants worldwide are now keenly waiting for the minutes of the US Fed’s meeting in January, for any hints on its policy tightening plans. The minutes are due on Wednesday.
FORWARDS
Premium on the dollar/rupee forwards contract rose due to dollar buys by banks on behalf of importers, dealers said.
On an annualised basis, premium on the one-year, exact-period dollar/rupee contract was 3.85%, compared with 3.76% on Monday. The premium was 290.02 paise compared with 284.13 paise on Monday.
OUTLOOK
On Wednesday, the rupee may take opening cues from the overnight movement in the dollar index and crude oil prices, said dealers.
“I don’t think the rupee will appreciate beyond the 75.30/$1 level because even though all the factors turned in favour of the rupee today, its gains were limited,” said a dealer with a state-owned bank.
Dealers have pegged strong technical resistance for the rupee at 75.30 a dollar.
During the day, the rupee is seen in a range of 75.2000-75.7000 a dollar.
India Rupee – World FX: Most units up as Russia-Ukraine tensions ease
MUMBAI – Most global currencies rose against the dollar today amid easing of geopolitical tensions as reports earlier today said a number of Russian troops stationed near the Ukraine border were returning to their bases.
Earlier, the build-up of over 1,30,000 troops near the three sides of Ukraine borders had instilled fears of invasion by Russia.
The safe haven dollar fell in European trade. At 1500 IST, the dollar index, which measures the strength of the US currency against a basket of six major currencies, was at 96.04 against 96.37 on Monday. It was at 96.03 on Friday.
The pound sterling rose nearly 0.2% against the dollar today after the unemployment rate in the UK remained unchanged at 4.1% at the end of December, below the 4.2% consensus forecast from economists polled by The Wall Street Journal.
However, staff on payrolls of businesses rose only by 108,000 in January, slowing from December’s increase of 131,000 which was revised down from an original reading of 184,000.
The euro surged nearly 0.4% against the dollar today.
Commodity-linked currencies such as the Australian and New Zealand dollars also rose nearly 0.3% and 0.4%, respectively, against the dollar. (Arushi Jain)
India Rupee: Rises as fears over Russia-Ukraine war ease, shrs surge
NEW DELHI – The rupee reversed its early losses and rose against the dollar as risk sentiment improved after concerns about Russia-Ukraine conflict eased, said dealers.
Geopolitical tensions mounted after Russia stationed well over 130,000 troops along the three sides of Ukraine.
But earlier today, the Russian military said some of its troops are expected to return to their bases as a number of drills have finished.
Moreover, a sharp rise in domestic share indices also supported the Indian currency. At 1433 IST, the Nifty 50 and Sensex were up nearly 2.7% each.
The dollar index also came off its earlier high after Russia-Ukraine tensions eased, noting which banks cut their existing bets in favour of the dollar, dealers said.
This also provided support to the rupee, said dealers.
At 1433 IST, the dollar index, which measures the strength of the US currency against a basket of six major currencies, was at 96.03, against 96.37 on Monday. It was at 96.03 on Friday.
Rest of the day the rupee is seen 75.3000-75.6000 a dollar. (Arushi Jain and Pratiksha)
India Rupee: Falls as PSU banks buy dollars for oil cos; US unit firm
NEW DELHI – The rupee fell against the dollar today because some state-owned banks stepped in to purchase dollars on behalf of oil marketing companies, noting sharply elevated crude oil prices, said dealers.
Prices of Brent crude continued to rise and hovered near the $96-per-barrel mark on concerns related to a potential Russian invasion of Ukraine.
Russia has increased troops stationed on three sides of the Ukraine border. However, the country has so far dismissed the intention to invade Ukraine.
At 1040 IST, the April contract of Brent crude was at $95.88 per bbl on the Intercontinental Exchange, compared with the previous close of $96.48 per bbl.
Moreover, the dollar index rose sharply on Monday after St. Louis Federal Reserve President James Bullard reiterated calls for faster interest rate hikes by the US Federal Reserve, which also dampened sentiment for the Indian unit, said dealers.
At 1040 IST, the dollar index, which measures the strength in the US currency against a basket of six major currencies, was at 96.20, against 96.37 on Monday. It was at 96.03 on Friday.
On the flip side, a rise in domestic benchmark indices limited losses in the Indian unit, said dealers. At 1040 IST, the Nifty 50 and Sensex were nearly 0.2% higher each.
“The rupee is expected to move in a range of 75.50/$1-75.80/$1 today,” said a dealer with a state-owned bank. “The 75.80/$1 mark is crucial, if it breaks we might see some more depreciation (in the rupee).”
Dealers have pegged immediate key technical support for the rupee at 75.8000 a dollar.
During the day, the rupee is seen at 75.4000-75.8500 a dollar. (Pratiksha)
India Rupee: Expected range for rupee – Feb 15
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 Ashish Shirke
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