Informist, Monday, Jan 30, 2023
By Ananya Chaudhuri and Aiswarya Santhosh
NEW DELHI/MUMBAI – The rupee erased all its losses and ended largely steady against the dollar today on sales of the greenback by exporters during the fag-end of the session and a fall in the dollar index, dealers said.
After touching a low of 81.7200 a dollar during the day, the rupee settled at 81.4950 compared to 81.5225 a dollar on Friday.
The Indian unit started the day lower at 81.6350 a dollar tracking a firm dollar index. Three hours into the session, the rupee fell to the day’s low of 81.7200 a dollar as foreign banks stepped in to purchase the greenback on behalf of oil marketing companies and importers at around 81.61-81.62 a dollar level.
Dealers said foreign banks bought the dollar also on behalf of foreign portfolio investors looking to pull out from the domestic equity market, which also weighed on the Indian unit.
Dealers said some foreign banks sold the greenback ahead of the daily reference rate fixing at around 81.65-81.71 a dollar level, which limited losses for the Indian unit.
The rupee moved in a narrow range of 81.61-81.72 a dollar for majority of the session as traders refrained from placing fresh bets ahead of meeting outcomes of major central banks, especially the US Federal Reserve, this week, dealers said.
“A hawkish Fed with a 25-bps hike shall make DXY jump towards 103 to 104 levels and USDINR towards 81.80-82.20 levels,” said Amit Pabari, managing director, CR Forex. “Whereas, a less hawkish Fed with a 25-bps hike could keep DXY flat and so the USDINR.”
Traders await Fed policy meeting outcome for further guidance on rate hikes going ahead. The European Central Bank and the Bank of England’s policy meeting outcomes are also scheduled this week.
According to CME FedWatchTool, the odds for a 25-basis-point rate hike by the Fed stand at 99.2%, and traders are foreseeing the federal funds rate to peak at around 5% by the central bank’s March meeting.
During the final hour of trade, the rupee recovered from the day’s low and touched a high of 81.49 a dollar, as some banks stepped in to sell dollars on behalf of exporters for their month-end payment requirements, dealers said.
Moreover, the dollar index fell during European trading hours due to a rise in the euro. The euro gained as Spain’s consumer prices inched up 5.8% in January compared with the same month last year, faster than the 5.7% annual rate recorded in December and the first increase since last July.
At 1659 IST, the dollar index, which measures the strength of the greenback against a basket of six major currencies, was at 101.74 against 101.92 on Friday, and 101.84 on Thursday.
Dealers remained uncertain about the state of foreign portfolio inflows into the ongoing 200-bln-rupees follow-on public offering of Adani Enterprise Ltd, the flagship company of Adani Group. The offer opened on Friday and will conclude on Tuesday. Shares of some Adani Group companies continued their downward trend today as the controversy over the findings of US short-seller Hindenburg Research escalated.
On the domestic front, traders exercised caution before the India’s Budget for 2023-24 (Apr-Mar), due to be presented this Wednesday.
FORWARDS
Premiums on dollar/rupee one-year forward contracts ended largely steady as traders avoided placing heavy bets ahead of the outcome of the Fed policy meeting this week, dealers said.
“The forwards will remain range bound till the Fed outcome,” a dealer with a big state-owned bank said. “Some paying was heard in short tenures but other than that nothing much was there.”
Premium on the one-year dollar/rupee contract was 190.27 paise, against 188.00 paise on Friday. On an annualised basis, the premium was at 2.33%, against the previous close of 2.31%.
OUTLOOK
On Tuesday, the rupee will take cues from overnight movement in the dollar index and crude oil prices.
“There are numerous triggers surrounding the dollar/rupee this week. However, the rupee is likely to be in its current range until the FOMC outcome,” said a dealer with a private bank.
The next technical resistance for the rupee is pegged at 81.30 a dollar and support at 81.80 a dollar.
The rupee might move in the range of 81.30-81.80 a dollar during the day, dealers said.
India Rupee – World FX: Euro erases some gains on low German GDP data
India Rupee – World FX: Euro erases some gains on low German GDP data
MUMBAI – The euro erased some gains as the GDP of Europe’s largest economy, Germany, turned out to be a disappointment. GDP growth in Germany came in at 0.5% on year, compared to 0.8% expected. The euro, which rose to 0.4% earlier, was up 0.2% against the dollar after Germany’s GDP data was released.
However, the euro was also supported as Spain’s consumer prices inched up 5.8% in January compared with the same month last year, faster than the 5.7% annual rate recorded in December and the first increase since last July.
The yen was down 0.2% against the dollar after Bank of Japan Governor Haruhiko Kuroda on Monday said the central bank must continue its easy policy.
The Australian dollar was down 0.4% after it hit an eight-month high last week on the back of better than expected inflation data and recovery of demand in China. China is Australia’s biggest trading partner.
Market participants await US Fed’s policy meeting outcome for further cues on the central bank’s rate hike path going ahead. The policy meetings of the European Central Bank and the Bank of England are also scheduled for this week. (Kabir Sharma)
India Rupee: In thin band; multiple central bks’ policy outcome eyed
India Rupee: In thin band before multiple central bks’ policy outcome
MUMBAI – The rupee remained in a narrow range against the dollar today as traders stayed cautious ahead of multiple central banks policy meeting outcomes, especially the US Federal Reserve, this week, dealers said.
The dollar/rupee has moved in a thin band of 11 paise so far today.
“Volumes are low and there is not much happening, we are waiting for FOMC and ECB (European Central Bank) for further movement,” a dealer with a big state-owned bank said.
The meeting outcomes of the Fed, the European Central Bank and the Bank of England are scheduled for this week. Market participants waiting the Fed’s policy outcome for further cues on the central bank’s rate hike path going ahead.
According to CME FedWatchTool, the odds of a 25-basis-point rate hike by the Fed stand at 99.2%, and traders are seeing the federal funds rate to peak at around 5% by March’s meeting.
Dealers said domestic traders also stayed on the sidelines ahead of India’s Budget for 2023-24 (Apr-Mar), due to be presented on Wednesday.
Meanwhile, some banks bought dollars on behalf of oil marketing companies, which weighed on the rupee, dealers said.
Some foreign banks also bought dollars on behalf of foreign portfolio investors looking ot pull out from domestic equities, which further weighed on the rupee, dealers said. At 1353 IST, both the Sensex and Nifty 50 were down 1%.
However, some banks sold the greenback ahead of the daily reference rate fixing, which limited losses for the Indian unit, dealers said.
Dealers have pegged technical support for the rupee at 81.80 a dollar.
The Indian unit is expected to move in a range of 81.50-81.70 for the rest of the day, dealers said. (Kabir Sharma)
India Rupee – Asia FX: Most Asian units up as China resumes trade
MUMBAI – Most Asian currencies rose against the US dollar as China resumed trading following the end of the week-long Lunar new year holiday.
Asian markets got a boost following a statement from China’s State Council over the weekend, that it would promote consumption recovery as the major driver of the economy, aiming to boost imports and quicken the rollout of foreign investment projects.
The Chinese yuan rose by 0.6% against the greenback as investor sentiment improved in the country after the statement.
The Taiwan dollar was up by 0.7% against the dollar as the country’s benchmark Taiex rose by 3.18%.
The South Korean won and the Thai baht rose by 0.3% and 0.2% against the dollar respectively. (Aiswarya Santhosh)
India Rupee: Down as dollar index remains firm ahead of FOMC outcome
NEW DELHI – The rupee was lower against the greenback today as the dollar index remained firm ahead of major central banks’, especially the US Federal Reserve’s, policy meeting outcomes this week, dealers said.
Market participants are closely watching the US Fed’s policy meeting outcome for further cues on the central bank’s rate hike path going ahead. The policy meetings of the European Central Bank and the Bank of England are also scheduled for this week.
According to CME FedWatchTool, the odds for a 25-basis-point rate hike by the Fed stand at 99.2%, and traders are foreseeing the Federal funds rate to peak at around 5% by March’s meeting.
At 0934 IST, the dollar index, which measures the strength of the greenback against a basket of six major currencies, was at 101.96 against 101.92 on Friday, and 101.84 on Thursday.
Moreover, a rise in domestic share indices limited losses for the rupee, dealers said. At 0941 IST, both the Sensex and Nifty 50 were up 0.2%.
“Overall, considering expectations from the events globally and domestically, the rupee is likely to consolidate between a broad range of 80.80 to 82.20 levels,” said Amit Pabari, managing director, CR Forex, in a note. “That makes 80.80-81.20 a buying zone for importers and between 81.80-82.20 a selling zone for exporters for the near to medium term.”
Dealers said domestic traders are expected to largely stay on the sidelines ahead of India’s Budget for 2023-24 (Apr-Mar), due to be presented on Wednesday.
Dealers have pegged technical support for the rupee at 81.80 a dollar. The rupee is expected to move in a range of 81.40-81.80 for the rest of the day, dealers said. (Ananya Chaudhuri)
India Rupee: Expected range for rupee – Jan 30
MUMBAI – Following are the expected support and resistance levels for the rupee today, as forecasted by leading banks and brokerages in an Informist poll:
(Aiswarya Santhosh)
End
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Aditya Sakorkar
For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.
Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.
Informist Media Tel +91 (11) 4220-1000
Send comments to [email protected]
© Informist Media Pvt. Ltd. 2023. All rights reserved.
Source: Cogencis
