Informist, Tuesday, May 9, 2023

By Kabir Sharma

MUMBAI – The rupee fell to an over two-week low against the dollar today as public sector banks persistently bought the greenback on behalf of oil marketing companies, dealers said.

The Indian unit fell below the crucial mark of 82 a dollar as oil companies bought the greenback fearing further depreciation in the rupee after the release of US inflation data, due Wednesday. 

The Indian currency settled at 82.0375 a dollar today, compared to 81.7950 on Monday. 

"They (oil marketing companies) are of the view that it (dollar/rupee) will rise after US CPI, so they want to buy at these levels," a dealer with a foreign bank said. 

The greenback strengthened globally ahead of the release of US consumer price index. Economists polled by Reuters see a rise of 0.4% in both headline and core CPI readings in April, with the annual pace of core inflation going down to 5.5%. The headline inflation index reading was 5% and core was 5.6% in March.

The US inflation report will help determine the Federal Reserve's next policy move in its June meeting. 

At 1631 IST, the dollar index was at 101.51 as against 101.38 on Monday. It was at 101.21 on Friday.

The rupee opened slightly lower at 81.8350 a dollar today and fell in early trade tracking broad-based strength in the dollar after the release of the US Federal Reserve's loans survey.   

Credit conditions for US businesses and households continued to tighten in the first months of the year, according to the Fed's quarterly Senior Loan Officer Opinion survey, but this was probably due to the impact of the central bank's aggressive rate hikes rather than the turmoil in the banking sector.

The Indian unit started falling as banks bought the greenback on behalf of oil marketing companies expecting depreciation in the rupee after US inflation data and as they were expecting that oil prices may increase further after rising 4% on Monday and over 2% on Tuesday. 

"Crude was going up and so oilers were buying, they were not just looking at dollars but at crude prices also," a dealer with a state-owned bank said. 

Prices of the commodity rose over 2% on Monday as fears of recession alleviated on the back of strong economic data from the US. Prices also rose as oil companies in Canada shut production of at least 280,000 barrels of oil equivalent per day, or more than 3% of Canada's output in reaction to wildfires in Alberta that have forced over 30,000 people to flee their homes.

At 1630 IST, the June contract of Brent crude oil on the Intercontinental Exchange was at $76.41 a bbl as against $77.01 a bbl on Monday. It was at $75.30 a bbl on Friday. 

Further, the rupee fell to the day's low of 82.1425 a dollar, which it touched for the first time since Apr 21, as stop losses were triggered on short dollar bets around 81.95 a dollar level. 

Some dealers also said that more stop-losses were triggered on short dollar bets at 82.10 a dollar, which further weighed on the Indian unit. 

However, some banks sold the greenback likely for foreign fund inflows into domestic equities, which provided slight support to the rupee, dealers said. 

FORWARDS

Premium on the one-year dollar/rupee forward contract ended at near a three-week low tracking a jump in US Treasury yields on Monday, dealers said. US Treasury yields rose due to optimism that the most severe stress in the US regional banking system may be over.

Premiums on forwards of a currency pair are reflective of the interest rate differential between the two countries. 

Premium on the dollar/rupee forwards also fell because some exporters sold the greenback for forward delivery to take advantage of the fall in the rupee against the dollar in the spot market, dealers said.

"There has been receiving in the forwards during the past few days, seems like it may continue," said a dealer with a state-owned bank. "This also has to do with good support for premiums around 2.20%"

The premium on the one-year dollar/rupee contract was 179.76 paise, against 180.99 paise on Monday. On an annualised basis, the premium was at 2.17%, as against the previous close of 2.21%.

OUTLOOK

On Wednesday, the rupee will take cues from overnight movement in the dollar index and crude oil prices. 

Market participants await the US CPI data for April due on Wednesday. 

"Tomorrow's data is crucial, market is awaiting US CPI for any further cues," a dealer with a state-owned bank said. 

Dealers see immediate key technical support for the rupee at 82.20 a dollar. During the day, the rupee is seen in the range of 81.80-82.20 a dollar.

India Rupee - World FX: Dollar index strengthens ahead of US CPI

MUMBAI - The dollar index rose globally today ahead of the US CPI data for April, due to be released on Wednesday. According to a Reuters poll, inflation in the world's largest economy is expected to have risen 0.4% last month after a gain of 0.1% in March. 

Market participants also await US weekly jobless claims and consumer sentiment data, due this week. The data is expected to provide cues on the Federal Reserve's monetary policy decisions moving ahead. 

At 1519 IST, the dollar index was at 101.51 as against 101.38 on Monday. It was at 101.21 on Friday.

The Australian dollar fell 0.3% against the greenback after data showed retail sales in the country eased in the March quarter. Retail sales volumes fell 0.6% in Jan-Mar, according to data from the Australian Bureau of Statistics. 

The euro fell 0.2% against the greenback, while the pound sterling was flat. (Aiswarya Santhosh)

India Rupee: Slumps on oil cos' dlr buys; stop-losses triggered

MUMBAI – The rupee fell below the 82-per-dollar level for the first time in almost two weeks as banks persistently bought the greenback on behalf of oil marketing companies, dealers said.

"Oilers are consistently buying as these levels have suddenly become very attractive," a dealer with a foreign bank said. 

Continuous dollar purchases by oil importers led to stop-losses being triggered on short dollar bets around 81.95 a dollar level, dealers said.

At 1342 IST, the June contract of Brent crude oil on the Intercontinental Exchange was at $76.30 a barrel as against $77.01 a bbl on Monday. It was at $75.30 a bbl on Friday.
 

"Everyone had a view that once it (dollar/rupee) touches 81.90-95 level, it will start going back up, but it did not happen. So, as soon as the pair crossed 81.95, a lot of stop-losses were triggered," a dealer with a big state owned bank said. 

Some dealers also said that more stop-losses were triggered on short dollar bets at 82.10 a dollar, and that it may be hard to stop the domestic unit from touching 82.20 in the near term.

Moreover, some banks bought the greenback for foreign fund outflows that also weighed on the rupee, dealers said. 

Dealers have pegged the next technical support for the rupee at 82.20 a dollar. During the day, the rupee is seen at 81.90-82.40 a dollar (Kabir Sharma)

India Rupee - Asia FX:Most down as dlr recovers ahead of US CPI data

MUMBAI – Most Asian currencies were down against the dollar as the greenback strengthened globally ahead of the release of the US inflation data, due on Wednesday. 

Economists polled by Reuters see a rise of 0.4% in both headline and core CPI readings in April, with the annual pace of core inflation going down to 5.5%. In March, the headline inflation index reading was 5% and core was 5.6%.

The greenback also strengthened post the release of the US Federal Reserve's loans survey, which showed that credit conditions in the country were not as bad as expected.  

The US Federal Reserve's quarterly Senior Loan Officer Opinion survey revealed that credit conditions for US businesses and households continued tightening in the first months of the year, but this was likely due to the impact of the central bank's aggressive rate hikes rather than the banking sector turmoil.

At 1229 IST, the dollar index was at 101.43 as against 101.38 on Monday. It was at 101.21 on Friday.

The Philippines peso headlined the losses and was down 0.8% against the dollar. The Indonesian rupiah and South korean won were down 0.2% each against the dollar. 

Bucking the trend, the Thai baht was up 0.4% against the greenback. (Kabir Sharma) 

India Rupee: Slightly down as dollar index rises ahead of US CPI

MUMBAI – The rupee fell slightly against the dollar today as the greenback strengthened ahead of US inflation data for April, due on Wednesday, dealers said. 

Market participants await the CPI print for cues on the Federal Reserve's monetary policy decisions moving forward. The data is expected to show that CPI climbed 0.4% in April after gaining 0.1% in March, according to a poll by Reuters. 

Meanwhile, the Senior Loan Officer Opinion Survey, a quarterly survey by the Fed, showed the tightening in credit conditions for US business and households at the beginning of the year was possibly due to the impact of the Fed's aggressive rate hikes rather than severe stress in the banking sector.

At 0913 IST, the dollar index was at 101.47 as against 101.38 on Monday. It was at 101.21 on Friday.

"Today, it (USDINR) opened higher, it will likely move to 81.90 levels today," said a dealer with a state-owned bank.

However, a rise in domestic equity indices limited losses for the Indian unit. At 0914 IST, the Nifty 50 and the Sensex were up 0.2%. 

Dealers see immediate key technical support for the rupee at 81.90 a dollar. During the day, the rupee is seen at 81.60-82.00 a dollar.  (Aiswarya Santhosh)

India Rupee: Expected range for rupee - May 9

MUMBAI – Following are the expected support and resistance levels for the rupee today, as forecasted by leading banks and brokerages in an Informist poll:

(Kabir Sharma)

End

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Edited by Aditya Sakorkar

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