Informist, Tuesday, Nov 16, 2021

By Richard Fargose

MUMBAI – The rupee settled higher against the dollar today because some foreign banks sold the US unit likely on behalf of foreign investors who participated in Macrotech Developers' qualified institutional placement, dealers said.

The rupee closed at 74.3725 a dollar today as against 74.4825 a dollar at 1530 IST on Monday.

Dealers said a US-based bank and a Singapore-based bank, among other foreign lenders, are likely to have sold dollars aggressively for foreign investors for investment in Macrotech Developers.

Real-estate company Macrotech Developers has raised around 40 bln rupees ($500 mln) via the sale of shares to institutional investors.

Today, the Indian currency had opened slightly lower as an overnight surge in the greenback to a 16-month high and US Treasury yields moving closer to 52-week highs dented sentiment for the Indian currency.

Emerging market currencies were under pressure as the dollar and US Treasury yields gained on the view that the US Federal Reserve would raise rates in July next year as inflation in the world's largest economy hit 6.2% in October, over three times the US central bank's long-term target and an almost 31-year high.

At 1602 IST, the dollar index, which measures the strength of the US currency against a basket of six major currencies, was at 95.58 compared with 95.41 on Monday. It was at 95.12 on Friday.

A rise in crude oil prices also weighed on the rupee. The Brent crude oil futures contract for January delivery, which had inched lower on Monday, was up 35 cents to $82.39 per bbl at 1605 IST as fears over extra supply ebbed.

However, the Indian currency did not weaken much as foreign banks aggressively sold dollars around the 74.52/$1 level.

Meanwhile, state-owned and private banks also stepped in to sell dollars on behalf of exporters at relatively higher dollar/rupee levels near 74.51 a dollar, dealers said.

In the early part of the session, the domestic unit moved in a thin range of 74.46-74.53 amid low volumes, said dealers.

However, in the later part of trade, the Indian unit started rising due to lack of significant buying amid persistent dollar sales by banks.

The rupee rose to the day's high of 74.2800 a dollar today.

Gains in the rupee were capped as traders and importers stepped in to buy the dollar noting its strength globally.

"Inflows led to some gains for rupee today, but traders remains bullish on the dollar. On every dip there will be a buying pressure," said a dealer with state-owned bank.

Investors worldwide now await the release of US retail sales data, due later today, for more cues about the Fed's policy normalisation.

FORWARDS

The premium on dollar/rupee forwards contract ended sharply higher because foreign banks purchased dollars for forward delivery on behalf of importers noting firm dollar globally, dealers said.

On an annualised basis, the premium on the one-year, exact-period dollar/rupee contract was at 4.71%, against 4.65% on Monday. The premium was at 350.21 paise compared with 346.09 paise on Monday.

OUTLOOK

On Wednesday, the rupee may take opening cues from movement in the dollar index and US bond yields post te release of US retail sales data.

"Investors are awaiting US retail sales data due today for clues as to where the dollar may be headed next," said a dealer with a foreign bank. 

During the day, the rupee is seen within the range of 74.20-74.70 a dollar.

India Rupee - World FX: Dollar firm ahead of US retail sales data

NEW DELHI – The dollar edged higher against other major currencies in the European trade today as investors awaited retail sales data for the US, due later today, for cues on when the US Federal Reserve may hike interest rates.

The dollar and US Treasury yields gained on the view that the US Federal Reserve would raise rates in July next year as the world's largest economy saw inflation surge by 6.2% in October, over three times the US central bank's long-term target and a near 31-year high. 

At 1545 IST, the dollar index, which measures strength in the US currency against a basket of six major currencies, was at 95.54 compared with 95.41 on Monday. It was at 95.12 on Friday.

The pound sterling rose 0.4% against the dollar after the release of stronger than expected employment data of the UK, lifting the chance of the Bank of England hiking interest rates in December. 

The euro was largely steady against the dollar, having extended recent losses on Monday after Europe's central bank chief pushed back against the need to act to tame inflation. A fresh wave of COVID-19 cases in the Europe region also hurt the common currency. (Pratiksha)

India Rupee: Falls as surge in dlr weighs; US retail sales data eyed

MUMBAI – The rupee fell in early trade today as an overnight surge in the greenback to a 16-month high and US Treasury yields moving closer to 52-week highs dented sentiment for the Indian currency, dealers said.

"The dollar index effect can be seen on rupee. Traders are now more bullish on the greenback," said a daeler with a private bank.

At 1040 IST, the dollar index, which measures the strength of the US currency against a basket of six major currencies, was at 95.42 compared with 95.41 on Monday. It was at 95.12 on Friday

The dollar and US Treasury yields gained on the view that the US Federal Reserve would raise rates in July next year, as the world's largest economy saw inflation hit 6.2% in October, over three times the US central bank's long-term target and a near 31-year high

Meanwhile, a rebound in crude oil prices also weighed on the rupee. The Brent crude oil futures contract for January delivery, which had inched lower on Monday, rose 80 cents to $82.85 per bbl in Asian trade today as fear over extra supply ebbed.

Dealers expect the rupee to trade in a narrow range today, while investors will eye US retail sales data, due for release today, for more cues about the Fed's policy normalisation.

The Indian unit is seen at 74.3000-74.7000 a dollar during the day.  (Richard Fargose)

India Rupee - Asia FX: Most units steady; Biden and Xi meet eyed

NEW DELHI – Most Asian currencies were steady in early trade as a key meeting between US President Joe Biden and China's Xi Jinping is underway.

Asian units were supported by a rise in local equity markets as relief in China’s property sector lifted sentiment. However, the gains were limited due to a strong dollar globally. 

The greenback gained strength on expectations that the US would hike rates before other major central banks after the European Central Bank President Christine Lagarde reiterated her view that conditions for a rate hike were "very unlikely to be met in 2022".

At 1000 IST, the dollar index, which measures strength in the US currency against a basket of six major currencies, was at 95.43 compared with 95.41 on Monday. It was at 95.12 on Friday.

Meanwhile, the Thai baht was up nearly 0.1% against the dollar, after data released on Monday showed that the country’s economy contracted less than expected in Jul-Sep by 0.3% as businesses started a slow recovery from the coronavirus-driven slump in activity, while the reopening of the tourism sector raised hopes of a steady revival. 

However, the Philippine peso weakened 0.1%, as the country's central bank said over the weekend that it would continue its accommodative policy stance even if the economy exceeds the government's growth target this year.  (Pratiksha)

India Rupee: Expected range for rupee - Nov 16

MUMBAI - The following are the expected support and resistance levels for the rupee, as forecast by leading banks and brokerages in an Informist poll:

(Richard Fargose)

End

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

Edited by Snigdha Kuttikat

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