Informist, Wednesday, Nov 3, 2021

By Arushi Jain

MUMBAI – The rupee rose against the dollar today because foreign banks sold dollars for overseas investments into initial public offerings of various Indian companies, dealers said.

The Indian unit closed nearly 23 paise higher at 74.4550 a dollar today. The rupee had settled at 74.6775 at 1530 IST on Tuesday.

The share issue of PB Fintech, the parent of insurance aggregator platform Policybazaar and personal loan aggregator platform Paisabazaar, opened on Monday and closed today. The company aimed to raise over 60 bln rupees via fresh issue of shares and stake sell by existing shareholders.

Offers of SJS Enterprises and Sigachi Industries also closed today. 

The local unit touched the day's high at 74.4500 a dollar today.

However, a fall in domestic equity indices weighed on the sentiment for the local unit, said dealers. The Nifty 50 and the Sensex ended over 0.3% and 0.4% lower, respectively.

Further gains in the Indian rupee were limited because state-owned banks purchased dollars on behalf of oil marketing companies, noting elevated prices of Brent crude oil near $84-per-barrel, said dealers.

At 1634 IST, the December contract of Brent crude oil on the Intercontinental Exchange was at $83.14 per bbl compared with $84.72 a bbl at close on Tuesday.

Investors worldwide await the meeting of the Organization of the Petroleum Exporting Countries and its allies on Thursday. The cartel is likely to continue with its plans to increase output by just 400,000 bbl per day every month, at a time when global demand has shot up.

Dealers said that currency traders refrained from placing fresh bets on either side of the rupee today ahead of the truncated trading week. Domestic markets will remain closed on Thursday and Friday on account of Diwali.

Globally, investors await Fed Chair Jerome Powell's post-meeting speech for his take on inflation expectations and to gauge the timing of interest rate hikes.

US policymakers are expected to make significant announcements on plans to begin tapering the Fed's $120-bln monthly asset purchase programme amid concern over elevated inflation.

According to a forecast by Goldman Sachs, the US investment bank has moved the rate hike date closer by almost a year to July 2022 after the release of the inflation index data. The index of core personal consumption expenditures climbed 0.2% on month in September, and 3.6% on year in the US.

The greenback remained steady against a basket of major currencies and at 1634 IST, the dollar index, which measures strength in the US currency against a basket of six major currencies, was at 94.02 compared with 94.09 on Tuesday. It was at 93.88 on Monday.

Investors also look forward to the UK central bank meeting, scheduled for Thursday.

"While the expectation of an accelerated rate hike cycle (by Fed) can pressurise riskier assets and emerging markets, the Indian rupee may still continue to get support from various IPO inflows and perform better than its Asian peers," said a dealer with a brokerage firm.

FORWARDS

The premium on dollar/rupee forwards contract ended a tad lower amid thin trade because banks sold dollars for forward delivery on behalf of exporters, dealers said.

On an annualised basis, premium on the one-year, exact-period dollar/rupee contract was at 4.73%, against 4.74% on Tuesday. The premium was at 352.06 paise compared with 354.89 paise on Tuesday.

OUTLOOK

Financial markets will remain closed on Thursday and Friday for Diwali Festival. 

On Monday, the rupee may take opening cues from the movement in the dollar index and US bond yields after the outcome of the Fed meeting later today.

Foreign banks are expected to continue to sell dollars for overseas investors for investment into the IPOs of Paytm that opens on Monday and closes on Wednesday, which may support the rupee, dealers said.

Dealers have now pegged key technical resistance for the rupee at 74.30 a dollar and the support at 75.10 a dollar.

During the day, the rupee is seen in a range of 74.3000-74.9000 a dollar.

India Rupee - World FX: Dlr, sterling flat ahead of central bk meets

NEW DELHI – The dollar was flat in early European trade ahead of the US Federal Open Market Committee meeting outcome later today. Investors will wait for the US Federal Reserve's decision on interest rates and expect the Fed to announce its plans of tapering the $120-bln monthly bond-buying purchase programme amid concerns about elevated inflation.

The dollar index remained steady ahead of the Fed meeting and at 1514 IST, the dollar index, which measures strength in the US currency against a basket of six major currencies, was at 94.01 compared with 94.09 on Tuesday. It was at 93.88 on Monday.

The pound sterling was flat against the dollar ahead of the Bank of England's policy meeting on Thursday. Investors showed caution today amid uncertainty about the central bank increasing interest rates amid soaring inflation.

Commodity-linked currencies such as the Australian and New Zealand dollars were both up nearly 0.1% against the dollar.

The Australian dollar recovered today after falling sharply on Tuesday after the Reserve Bank of Australia announced a less hawkish policy than expected.

The New Zealand dollar was supported by better than expected employment data and by comments from the Reserve Bank of New Zealand that said the country’s financial system remains resilient in the face of COVID-19. The central bank also said growing global inflationary risks could lead to higher interest rates. (Shubham Rana)

India Rupee: Rises on inflow for IPOs; FOMC meeting in focus

MUMBAI – The rupee rose against the dollar today because foreign banks sold dollars for overseas investments into Indian companies raising funds through initial public offerings, dealers said.

The three-day IPO of PB Fintech, the parent of insurance aggregator platform Policybazaar and personal loan aggregator platform Paisabazaar, closes today.

The company plans to issue fresh shares worth 37.50 bln rupees and existing shareholders will sell shares amounting to 22.68 bln rupees.

The share issue of SJS Enterprises and Sigachi Industries also closes today.

A rise in domestic equity indices further supported sentiment for the local unit, said dealers. At 1020 IST, both the Nifty 50 and the Sensex were up by over 0.3% each.

Investors worldwide remained cautious ahead of the US Federal Open Market Committee's meeting outcome later today, said dealers.

The US Federal Reserve is expected to announce its interest rate decision and plans to begin tapering the massive $120-bln monthly asset purchase programme amid concern about elevated inflation.

Investors also await the outcome of the UK central bank meeting on Thursday. 

The dollar index remained steady ahead of the Fed meeting and at 1020 IST, the dollar index, which measures strength in the US currency against a basket of six major currencies, was at 94.07 compared with 94.09 on Tuesday. It was at 93.88 on Monday.

The Indian unit is expected to move in a range of 74.4000-74.8000 a dollar during the day.  (Arushi Jain)

India Rupee - Asia FX: Most down on caution ahead of FOMC meet outcome

NEW DELHI – Most Asian currencies were down against the US dollar in early trade today due to caution ahead of the outcome of the US Federal Open Market Committee's meeting, due later today.

Policymakers in the US are widely expected to make important announcements on plans to begin tapering the Fed's $120-bln monthly asset purchase programme. Investors are concerned about any sharp unwinding of the pandemic-era policy support by the Federal Reserve.

At 0915 IST, the dollar index, which measures the strength of the US unit against a basket of six major currencies, was at 94.06 compared with 94.09 on Tuesday. It was at 93.88 on Monday. 

Investors are also awaiting the outcome of a meeting of the Bank of England, scheduled for Thursday.

The South Korean won fell 0.6%, the most among its Asian peers. (Pratiksha)

India Rupee: Expected range for rupee - Nov 3

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

(Arushi Jain)

End

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

Edited by Mainak Moitra

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