Informist, Friday, Jan 13, 2023

By Aiswarya Santhosh

MUMBAI – The rupee closed at a six-week high against the dollar today due to weakness in the US unit globally and dollar sales by exporters, dealers said. 

The rupee settled at 81.3250 dollar, against 81.5500 on Thursday, gaining for the fifth consecutive session and posting a gain of 134 paise this week.

The rupee opened 29 paise stronger at 81.2600 a dollar as the dollar index fell to a fresh seven-month low on Thursday after US CPI data showed inflation had cooled down in December, raising expectations of smaller rate hikes by the US Federal Reserve moving ahead, dealers said.

US headline inflation moderated to 6.5% in December from 7.1% in November, in line with expectations, marking the first decline in the annual pace of consumer price rise in the US in over two and a half years.

Market participants now largely expect a 25 basis point interest rate hike in the Fed's Jan 31-Feb 1 meeting. Even Philadelphia Fed President Patrick Harker said in a speech that hikes of 25 bps will be appropriate going forward.

At 1641 IST, the dollar index, which measures the strength of the greenback against a basket of six major currencies, was at 102.17 as against 102.24 on Thursday. It was at 103.18 on Wednesday. The index fell to 102.08 on Thursday.

Moreover, the rupee was supported by persistent sales of the greenback by foreign banks on behalf of exporters, dealers said.

Dealers said exporters continuously sold around the 81.45 level as they expect the Indian currency to appreciate further from here.

The rupee was also supported by a rise in domestic equities. Both the Nifty 50 and the Sensex closed over 0.5% higher each.

However, gains for the Indian unit were limited as state-owned banks rushed to buy dollars for oil marketing companies and importers who wanted to take advantage of the lower dollar/rupee level, dealers said.

"Oil companies and importers were covering (dollars) at a rapid pace today," said a dealer with a private bank. "The current (dollar/rupee) levels were attractive for them."

Crude oil prices rose today, aided by the softer US CPI data and overall optimism on the demand outlook for crude following China's opening of its borders with Hong Kong last weekend.

At 1641 IST, the March contract of Brent crude oil was at $84.82 a barrel on the Intercontinental Exchange as against $84.03 a bbl Thursday. The contract settled at $82.67 a bbl on Wednesday.

"Looking at the amount of dollar weakness, I think the rupee should strengthen further to 81.10 from here," said a senior treasury official with a private bank. "Now the concern is that oil prices are inching, up so that may be a worry. Only if there are good inflows we can see rupee rising beyond the 81.10-81.00 levels and that may remain a crucial support."

Dealers said the Reserve Bank of India does not seem to have purchased dollars actively since the rupee started to appreciate. They believe the RBI will buy dollars to prevent the rupee from rising above 81 a dollar.

FORWARDS

Premiums on dollar/rupee one-year forward contracts rose sharply tracking a fall in US Treasury yields.

Premium on the one-year dollar/rupee contract was at 187.34 paise, against 178.51 paise on Thursday. On an annualised basis, the premium was at 2.30%, against the previous close of 2.19%.

The yield on the benchmark 10-year US treasury fell to a four-week low on Thursday, after data showed headline inflation in the US fell in December, which increased expectations that the Federal Reserve will dial down on the pace of rate hikes.

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

Dollar/rupee forward premiums also rose as a stronger rupee prompted banks and importers to lock in attractive levels to book dollars for forward delivery, dealers said.

OUTLOOK

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

"The rupee will likely appreciate further going forward," said a dealer with a state-owned bank. "The dollar index will face a gradual depreciation after yesterday's softer CPI data."

Dealers said the RBI may intervene in the market through dollar purchases to prevent the currency from appreciating sharply.

Dealers have pegged immediate technical resistance for the rupee at 81.20 a dollar, a break of which can lead to the rupee testing 81.00.

The rupee is seen in a band of 81.20-81.70 a dollar during the day, dealers said.

India Rupee - World FX: Dollar index hits 7-month low, yen surges

NEW DELHI – The dollar index hit a fresh seven-month low in European trade as data on US CPI for December showed inflation cooling in the world's largest economy. This led to expectations of smaller rate hikes by the US Federal Reserve.

Headline inflation in the US moderated to 6.5% in December from 7.1% in November, in line with expectations. This was the first decline in the annual pace of consumer price rise in the US in over two and a half years. 

At 1457 IST, the dollar index, which measures the strength of the greenback against a basket of six major currencies, was at 102.1 as against 102.24 on Thursday. It was at 103.18 on Wednesday. The index had fallen to 101.98 earlier today.

The Japanese yen rose to a seven-month high and was up 0.6% against the US currency after the yield on the benchmark Japanese bond crossed the central bank's tolerance band, putting the Bank of Japan under pressure to shift from its ultra-loose policy stance. Japan's 10-year government bond yield crossed the cap of 0.5%.

The pound sterling was up 0.2% against the dollar after data showed the country's GDP expanded 0.1% on month in November compared to a Reuters poll forecast of a 0.2% fall.

The euro was flat against the greenback after European Central Bank's policymaker Martins Kazaks told the media that rate cuts by the central bank at the end of 2023 were unlikely. It would take a deep recession and a surge in unemployment to roll back rate hikes. (Ananya Chaudhuri)

India Rupee: Firm as dollar index falls more, exporters sell dollars

MUMBAI – The rupee remained firm against the dollar as the dollar index fell further in European trade after a fall in US CPI data for December raised expectations of smaller interest rate hikes by the US Federal Reserve going forward, dealers said.

The US consumer price index declined for the first time in over two and a half years. The annual pace of US headline inflation slowed to 6.5% in December from 7.1% in November, on expected lines.

Market participants now expect a 25 basis points rate hike from the Fed in the next policy meeting in early February. Philadelphia Fed President Patrick Harker said in a speech that hikes of 25 bps will be appropriate going forward.

At 1417 IST, the dollar index, which measures the strength of the greenback against a basket of six major currencies, was at 102.06 as against 102.24 on Thursday. It was at 103.18 on Wednesday. The index fell to 102.08 on Thursday.

Moreover, foreign banks sold dollars on behalf of exporters on expectation that the Indian currency may appreciate further in the near term. This too provided support to the Indian unit, dealers said. 

"Foreign banks are selling (dollars) continuously around 81.45 level for exporters as they expect rupee to rise further," a dealer with a big state-owned bank said. 

On the other hand, state-owned banks purchased the greenback on behalf of oil marketing companies and other importers around the 81.30 a dollar level, which limited the gains of the Indian unit, dealers said.

However, dealers said the dollar purchases by importers were not aggressive in nature as they are waiting for better dollar/rupee levels in the near term.

Dealers have pegged immediate technical resistance for the rupee at 81.20 a dollar. They expect it to stay in the range of 81.10-81.60 during the day. (Kabir Sharma and Pratiksha)

India Rupee: Sharply up as dollar index slumps to 7-month low after US CPI

NEW DELHI – The rupee was sharply higher against the greenback as the dollar index plunged to a seven-month low after the US CPI moderated in December, raising hopes for smaller rate hikes by the US Federal Reserve moving ahead, dealers said.

The US consumer price index declined for the first time in over two and a half years. The annual pace of US headline inflation slowed to 6.5% in December from 7.1% in November, on expected lines.

Market participants now largely expect a 25 basis point interest rate hike in the Fed's Jan 31-Feb 1 meeting, with Philadelphia Fed president Patrick Harker saying in a speech that hikes of 25 basis points will be appropriate going forward.

At 0929 IST, the dollar index, which measures the strength of the greenback against a basket of six major currencies, was at 102.28 as against 102.24 on Thursday. It was at 103.18 on Wednesday. The index fell to 102.08 on Thursday.

Dealers said banks rushed to buy dollars on behalf of importers, noting a relatively lower level of dollar/rupee which limited gains for the rupee. "There's buying (of dollars) at around 81.30-81.35 (a dollar) level," a dealer from a state-owned bank said. 

Dealers said the exporters may step in to sell the greenback at around 81.40-81.45 a dollar level.

Dealers have pegged immediate technical resistance for the rupee at 81.20 a dollar. The unit is seen moving in a range of 81.10-81.60 per dollar, dealers said. (Ananya Chaudhuri)

India Rupee - Asia FX: Up as dlr index slumps to 7-mo low post CPI

MUMBAI – Most Asian currencies were up as the dollar index slumped to a fresh seven-month low on Thursday after softer US CPI data for December raised expectations of smaller interest rate hikes from the US Federal Reserve going forward. The US December consumer price index fell to 6.5% from 7.1% in November, the first fall in the last two-and-a-half years.

At 0947 IST, the dollar index, which measures the strength of the greenback against a basket of six major currencies, was at 102.28 as against 102.24 on Thursday. It was at 103.18 on Wednesday. The index fell to 102.08 on Thursday.

Further, Asian currencies were aided by a surge in domestic share indices. Optimism surrounding the reopening of China's borders with Hong Kong last weekend also aided the surge in Asian currencies.

The Philippines peso was up 0.4% against the greenback as the country's benchmark equity index PSEi rose 1.4%. (Aiswarya Santhosh)

India Rupee: Expected range for rupee - Jan 13

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 Ashish Shirke

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 (22) 6985-4000

Send comments to feedback@informistmedia.com

© Informist Media Pvt. Ltd. 2023. All rights reserved.

Informist, Friday, Jan 13, 2023

By Aiswarya Santhosh

MUMBAI – The rupee closed at a six-week high against the dollar today due to weakness in the US unit globally and dollar sales by exporters, dealers said. 

The rupee settled at 81.3250 dollar, against 81.5500 on Thursday, gaining for the fifth consecutive session and posting a gain of 134 paise this week.

The rupee opened 29 paise stronger at 81.2600 a dollar as the dollar index fell to a fresh seven-month low on Thursday after US CPI data showed inflation had cooled down in December, raising expectations of smaller rate hikes by the US Federal Reserve moving ahead, dealers said.

US headline inflation moderated to 6.5% in December from 7.1% in November, in line with expectations, marking the first decline in the annual pace of consumer price rise in the US in over two and a half years.

Market participants now largely expect a 25 basis point interest rate hike in the Fed's Jan 31-Feb 1 meeting. Even Philadelphia Fed President Patrick Harker said in a speech that hikes of 25 bps will be appropriate going forward.

At 1641 IST, the dollar index, which measures the strength of the greenback against a basket of six major currencies, was at 102.17 as against 102.24 on Thursday. It was at 103.18 on Wednesday. The index fell to 102.08 on Thursday.

Moreover, the rupee was supported by persistent sales of the greenback by foreign banks on behalf of exporters, dealers said.

Dealers said exporters continuously sold around the 81.45 level as they expect the Indian currency to appreciate further from here.

The rupee was also supported by a rise in domestic equities. Both the Nifty 50 and the Sensex closed over 0.5% higher each.

However, gains for the Indian unit were limited as state-owned banks rushed to buy dollars for oil marketing companies and importers who wanted to take advantage of the lower dollar/rupee level, dealers said.

"Oil companies and importers were covering (dollars) at a rapid pace today," said a dealer with a private bank. "The current (dollar/rupee) levels were attractive for them."

Crude oil prices rose today, aided by the softer US CPI data and overall optimism on the demand outlook for crude following China's opening of its borders with Hong Kong last weekend.

At 1641 IST, the March contract of Brent crude oil was at $84.82 a barrel on the Intercontinental Exchange as against $84.03 a bbl Thursday. The contract settled at $82.67 a bbl on Wednesday.

"Looking at the amount of dollar weakness, I think the rupee should strengthen further to 81.10 from here," said a senior treasury official with a private bank. "Now the concern is that oil prices are inching, up so that may be a worry. Only if there are good inflows we can see rupee rising beyond the 81.10-81.00 levels and that may remain a crucial support."

Dealers said the Reserve Bank of India does not seem to have purchased dollars actively since the rupee started to appreciate. They believe the RBI will buy dollars to prevent the rupee from rising above 81 a dollar.

FORWARDS

Premiums on dollar/rupee one-year forward contracts rose sharply tracking a fall in US Treasury yields.

Premium on the one-year dollar/rupee contract was at 187.34 paise, against 178.51 paise on Thursday. On an annualised basis, the premium was at 2.30%, against the previous close of 2.19%.

The yield on the benchmark 10-year US treasury fell to a four-week low on Thursday, after data showed headline inflation in the US fell in December, which increased expectations that the Federal Reserve will dial down on the pace of rate hikes.

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

Dollar/rupee forward premiums also rose as a stronger rupee prompted banks and importers to lock in attractive levels to book dollars for forward delivery, dealers said.

OUTLOOK

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

"The rupee will likely appreciate further going forward," said a dealer with a state-owned bank. "The dollar index will face a gradual depreciation after yesterday's softer CPI data."

Dealers said the RBI may intervene in the market through dollar purchases to prevent the currency from appreciating sharply.

Dealers have pegged immediate technical resistance for the rupee at 81.20 a dollar, a break of which can lead to the rupee testing 81.00.

The rupee is seen in a band of 81.20-81.70 a dollar during the day, dealers said.

India Rupee - World FX: Dollar index hits 7-month low, yen surges

NEW DELHI – The dollar index hit a fresh seven-month low in European trade as data on US CPI for December showed inflation cooling in the world's largest economy. This led to expectations of smaller rate hikes by the US Federal Reserve.

Headline inflation in the US moderated to 6.5% in December from 7.1% in November, in line with expectations. This was the first decline in the annual pace of consumer price rise in the US in over two and a half years. 

At 1457 IST, the dollar index, which measures the strength of the greenback against a basket of six major currencies, was at 102.1 as against 102.24 on Thursday. It was at 103.18 on Wednesday. The index had fallen to 101.98 earlier today.

The Japanese yen rose to a seven-month high and was up 0.6% against the US currency after the yield on the benchmark Japanese bond crossed the central bank's tolerance band, putting the Bank of Japan under pressure to shift from its ultra-loose policy stance. Japan's 10-year government bond yield crossed the cap of 0.5%.

The pound sterling was up 0.2% against the dollar after data showed the country's GDP expanded 0.1% on month in November compared to a Reuters poll forecast of a 0.2% fall.

The euro was flat against the greenback after European Central Bank's policymaker Martins Kazaks told the media that rate cuts by the central bank at the end of 2023 were unlikely. It would take a deep recession and a surge in unemployment to roll back rate hikes. (Ananya Chaudhuri)

India Rupee: Firm as dollar index falls more, exporters sell dollars

MUMBAI – The rupee remained firm against the dollar as the dollar index fell further in European trade after a fall in US CPI data for December raised expectations of smaller interest rate hikes by the US Federal Reserve going forward, dealers said.

The US consumer price index declined for the first time in over two and a half years. The annual pace of US headline inflation slowed to 6.5% in December from 7.1% in November, on expected lines.

Market participants now expect a 25 basis points rate hike from the Fed in the next policy meeting in early February. Philadelphia Fed President Patrick Harker said in a speech that hikes of 25 bps will be appropriate going forward.

At 1417 IST, the dollar index, which measures the strength of the greenback against a basket of six major currencies, was at 102.06 as against 102.24 on Thursday. It was at 103.18 on Wednesday. The index fell to 102.08 on Thursday.

Moreover, foreign banks sold dollars on behalf of exporters on expectation that the Indian currency may appreciate further in the near term. This too provided support to the Indian unit, dealers said. 

"Foreign banks are selling (dollars) continuously around 81.45 level for exporters as they expect rupee to rise further," a dealer with a big state-owned bank said. 

On the other hand, state-owned banks purchased the greenback on behalf of oil marketing companies and other importers around the 81.30 a dollar level, which limited the gains of the Indian unit, dealers said.

However, dealers said the dollar purchases by importers were not aggressive in nature as they are waiting for better dollar/rupee levels in the near term.

Dealers have pegged immediate technical resistance for the rupee at 81.20 a dollar. They expect it to stay in the range of 81.10-81.60 during the day. (Kabir Sharma and Pratiksha)

India Rupee: Sharply up as dollar index slumps to 7-month low after US CPI

NEW DELHI – The rupee was sharply higher against the greenback as the dollar index plunged to a seven-month low after the US CPI moderated in December, raising hopes for smaller rate hikes by the US Federal Reserve moving ahead, dealers said.

The US consumer price index declined for the first time in over two and a half years. The annual pace of US headline inflation slowed to 6.5% in December from 7.1% in November, on expected lines.

Market participants now largely expect a 25 basis point interest rate hike in the Fed's Jan 31-Feb 1 meeting, with Philadelphia Fed president Patrick Harker saying in a speech that hikes of 25 basis points will be appropriate going forward.

At 0929 IST, the dollar index, which measures the strength of the greenback against a basket of six major currencies, was at 102.28 as against 102.24 on Thursday. It was at 103.18 on Wednesday. The index fell to 102.08 on Thursday.

Dealers said banks rushed to buy dollars on behalf of importers, noting a relatively lower level of dollar/rupee which limited gains for the rupee. "There's buying (of dollars) at around 81.30-81.35 (a dollar) level," a dealer from a state-owned bank said. 

Dealers said the exporters may step in to sell the greenback at around 81.40-81.45 a dollar level.

Dealers have pegged immediate technical resistance for the rupee at 81.20 a dollar. The unit is seen moving in a range of 81.10-81.60 per dollar, dealers said. (Ananya Chaudhuri)

India Rupee - Asia FX: Up as dlr index slumps to 7-mo low post CPI

MUMBAI – Most Asian currencies were up as the dollar index slumped to a fresh seven-month low on Thursday after softer US CPI data for December raised expectations of smaller interest rate hikes from the US Federal Reserve going forward. The US December consumer price index fell to 6.5% from 7.1% in November, the first fall in the last two-and-a-half years.

At 0947 IST, the dollar index, which measures the strength of the greenback against a basket of six major currencies, was at 102.28 as against 102.24 on Thursday. It was at 103.18 on Wednesday. The index fell to 102.08 on Thursday.

Further, Asian currencies were aided by a surge in domestic share indices. Optimism surrounding the reopening of China's borders with Hong Kong last weekend also aided the surge in Asian currencies.

The Philippines peso was up 0.4% against the greenback as the country's benchmark equity index PSEi rose 1.4%. (Aiswarya Santhosh)

India Rupee: Expected range for rupee - Jan 13

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 Ashish Shirke

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 (22) 6985-4000

Send comments to feedback@informistmedia.com

© Informist Media Pvt. Ltd. 2023. All rights reserved.