Informist, Monday, Jan 16, 2023

By Ananya Chaudhuri and Aiswarya Santhosh

NEW DELHI/MUMBAI – The rupee ended sharply lower against the dollar today, snapping a five-day gaining streak, as state-owned and foreign banks persistently bought dollars for oil marketing companies and foreign portfolio investors, dealers said.

Today, the Indian unit settled 0.4% lower at 81.6125 a dollar.

The Indian currency started the day slightly higher at 81.2425 a dollar tracking a fall in the dollar index. The dollar index hit a seven-month-low in Asian trade, extending its fall from last week, as data showed US headline inflation moderated to 6.5% in December from 7.1% in November, which was on expected lines.

The ease in US inflation raised hopes for smaller rate hikes by the US Federal Reserve moving ahead. Market participants have priced in a likely 25-basis-point rate hike by the Fed in its in February monetary policy.

At 1644 IST, the dollar index, which measures the strength of the greenback against a basket of six major currencies, was at 102.24 as against 102.20 on Friday. It was at 102.25 on Thursday. The index fell to 101.77 in early trade today.

Shortly after opening, the Indian unit erased all gains as state-owned and foreign banks rushed to purchase the greenback on behalf of oil marketing companies and other importers noting the relatively lower dollar/rupee levels, dealers said. The overall sentiment in the market remained buy on dips in dollar/rupee levels, dealers said.

"Oil importers were covering at a rapid pace today," said a dealer with a private bank. "This led to a sharp fall in the unit." 

Moreover, foreign banks persistently bought the greenback on behalf of foreign portfolio investors, which further dragged the Indian unit to the day's low of 81.7350 a dollar, dealers said.

So far in January, overseas investors have pulled out nearly $2.41 bln from the Indian markets. Both the benchmark domestic share indices, Sensex and Nifty ended 0.3% down.

Some dealers speculated that the Reserve Bank of India purchased the greenback to replenish its foreign exchange reserves, which further exerted pressure on the Indian currency.

During the final leg of trade, some banks stepped in to sell dollars on behalf of exporters around 81.70 level. This limited losses for the Indian unit, dealers said. 

Meanwhile, volumes in the currency market was lacklustre as markets were closed in the US today on account of Martin Luther King's birthday.

Back home, data released today showed India's merchandise trade deficit fell to a six-month low of $23.76 bln in December from $23.89 bln the previous month. This provided some respite to the Indian unit, dealers said. 

FORWARDS

Premiums on dollar/rupee forward contracts fell as exporters sold dollars for forward delivery, noting a rise in the last two trading days, dealers said. In last two trading days, premium on the one-year dollar/rupee contract has jumped nearly 12 basis points.

The premium on the one-year dollar/rupee contract was 183.15 paise, against 187.34 paise on Friday. On an annualised basis, the premium was at 2.24%, against the previous close of 2.30%.

Premiums also fell tracking a rise in US Treasury yields on Friday, dealers said. The US Treasury yields rose on Friday as investors hesitated on the market's view that the US Federal Reserve will opt for interest rates cut later this year after a decline in the December US CPI data.

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

OUTLOOK

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

"On the upside, resistance is located around 81.50 to 81.80, where exporters who missed to book or have new exposures will look to sell and could be a cap for the pair (USDINR)," said Amit Pabari, managing director, CR Forex.

Market participants are now waiting for the Bank of Japan's monetary policy outcome on Wednesday, where the central bank is expected to alter its yield control policy. 

Dealers have pegged immediate technical support for the rupee at 81.80 a dollar.

The rupee is seen in a band of 81.30-81.80 a dollar during the day, dealers said.

India Rupee: Down as bks buy dlrs for oil cos, importers; volume thin

NEW DELHI – The rupee erased all earlier gains and fell against the greenback as state-owned and foreign banks stepped in to buy dollars for oil marketing companies and other importers, dealers said.

"Importers are buying (dollars) since morning. The overall sentiment is buying on dips (in dollar/rupee)," a dealer from a state-owned bank said.

Meanwhile, exporters remained on the sidelines and refrained from selling the greenback. Dealer said exporters might sell dollars at around 81.50-81.60 a dollar.

The rupee rose to a high of 81.2400 a dollar in early trade today, tracking weakness in the dollar index. The index has been on a falling spree after data on Thursday showed a decline in inflation in the US in December. 

At 1323 IST, the dollar index, which measures the strength of the greenback against a basket of six major currencies, was at 102.13 as against 102.20 on Friday. It was at 102.25 on Thursday. The index had fallen to 101.77 in early trade today.

Dealers said volumes in the currency market were lower than usual today, as markets in the US are closed today on account of Martin Luther King's birthday.

Some dealers said they expect the Reserve Bank of India to purchase dollars at around the key resistance level of 81.20 a dollar.

The unit is seen moving in a range of 81.00-81.40 per dollar, dealers said. (Ananya Chaudhuri)

India Rupee - Asia FX: Up as dlr index at 7-mo low, local shrs rise

MUMBAI - Most Asian currencies were up against the greenback as the dollar index touched a fresh seven-month low today, extending its fall from last week, following US consumer price data released on Thursday. 

The US headline inflation increased to 6.5% in December, the smallest rise since October 2021, after it had advanced to 7.1% in November. Market participants have now factored in a likely 25 basis points rate hike by the Federal Reserve in its February monetary policy meeting.

The dollar index also fell as the Japanese yen surged ahead of the Bank of Japan's monetary policy outcome on Wednesday, where the central bank is expected to alter its yield control policy. Markets have priced in for the Japanese central bank to step away from its ultra-easy monetary policy, which had on Friday caused the yield on Japan's benchmark 10-year government bonds to breach the central bank's new ceiling.  

At 1121 IST, the dollar index, which measures the strength of the greenback against a basket of six major currencies, was at 101.92 as against 102.20 on Friday. It was at 102.25 on Thursday. The index fell to 101.77 in early trade today.

Asian currencies were also supported by a surge in domestic share indices today. The Philippines peso was up 0.5% against the greenback as the country's benchmark PSEi index rose 2.17%. 

The South Korean won was 0.6% up against the dollar as the country's benchmark Kospi index rose 0.82%. (Aiswarya Santhosh)

India Rupee: A tad up as dlr index falls; importers' dlr buys weigh

MUMBAI – The rupee rose slightly against the greenback today as the dollar index touched a fresh seven-month low in early trade, dealers said. The US unit has been consistently weakening after US consumer prices on Thursday showed a decline in CPI for the first time in more than two and a half years in December.

The US headline inflation increased to 6.5% in December, the smallest rise since October 2021, after it had advanced to 7.1% in November. Market participants have now factored in a likely 25-basis-point rate hike by the Federal Reserve in its in February monetary policy.

The dollar index also fell as the Japanese yen surged ahead of the Bank of Japan's monetary policy outcome on Wednesday, where the central bank is expected to alter its yield control policy.

At 0920 IST, the dollar index, which measures the strength in the greenback against a basket of six major currencies, was at 101.88 as against 102.20 on Friday. It was at 102.25 on Thursday. The index fell to 101.77 in early trade today.

Meanwhile, some banks rushed to purchase dollars on behalf of importers who wanted to take advantage of relatively lower dollar/rupee levels, dealers said. This limited gains for the Indian unit, dealers said.

"Importers are likely to come aggressively around 81.20 (a dollar) level," said a dealer with a state-owned bank. "Exporters may remain on the sidelines for now." 

Dealers said volumes in the currency market may remain lower than usual today as markets are closed in the US today on account of Martin Luther King's birthday.

Dealers expect the Reserve Bank of India to purchase dollars to prevent the rupee's excessive appreciation. They have pegged immediate technical resistance for the rupee at 81.20 a dollar.

The unit is seen moving in a range of 81.00-81.40 per dollar, dealers said. (Aiswarya Santhosh)

India Rupee: Expected range for rupee - Jan 16

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 Tanima Banerjee

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 feedback@informistmedia.com

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

Informist, Monday, Jan 16, 2023

By Ananya Chaudhuri and Aiswarya Santhosh

NEW DELHI/MUMBAI – The rupee ended sharply lower against the dollar today, snapping a five-day gaining streak, as state-owned and foreign banks persistently bought dollars for oil marketing companies and foreign portfolio investors, dealers said.

Today, the Indian unit settled 0.4% lower at 81.6125 a dollar.

The Indian currency started the day slightly higher at 81.2425 a dollar tracking a fall in the dollar index. The dollar index hit a seven-month-low in Asian trade, extending its fall from last week, as data showed US headline inflation moderated to 6.5% in December from 7.1% in November, which was on expected lines.

The ease in US inflation raised hopes for smaller rate hikes by the US Federal Reserve moving ahead. Market participants have priced in a likely 25-basis-point rate hike by the Fed in its in February monetary policy.

At 1644 IST, the dollar index, which measures the strength of the greenback against a basket of six major currencies, was at 102.24 as against 102.20 on Friday. It was at 102.25 on Thursday. The index fell to 101.77 in early trade today.

Shortly after opening, the Indian unit erased all gains as state-owned and foreign banks rushed to purchase the greenback on behalf of oil marketing companies and other importers noting the relatively lower dollar/rupee levels, dealers said. The overall sentiment in the market remained buy on dips in dollar/rupee levels, dealers said.

"Oil importers were covering at a rapid pace today," said a dealer with a private bank. "This led to a sharp fall in the unit." 

Moreover, foreign banks persistently bought the greenback on behalf of foreign portfolio investors, which further dragged the Indian unit to the day's low of 81.7350 a dollar, dealers said.

So far in January, overseas investors have pulled out nearly $2.41 bln from the Indian markets. Both the benchmark domestic share indices, Sensex and Nifty ended 0.3% down.

Some dealers speculated that the Reserve Bank of India purchased the greenback to replenish its foreign exchange reserves, which further exerted pressure on the Indian currency.

During the final leg of trade, some banks stepped in to sell dollars on behalf of exporters around 81.70 level. This limited losses for the Indian unit, dealers said. 

Meanwhile, volumes in the currency market was lacklustre as markets were closed in the US today on account of Martin Luther King's birthday.

Back home, data released today showed India's merchandise trade deficit fell to a six-month low of $23.76 bln in December from $23.89 bln the previous month. This provided some respite to the Indian unit, dealers said. 

FORWARDS

Premiums on dollar/rupee forward contracts fell as exporters sold dollars for forward delivery, noting a rise in the last two trading days, dealers said. In last two trading days, premium on the one-year dollar/rupee contract has jumped nearly 12 basis points.

The premium on the one-year dollar/rupee contract was 183.15 paise, against 187.34 paise on Friday. On an annualised basis, the premium was at 2.24%, against the previous close of 2.30%.

Premiums also fell tracking a rise in US Treasury yields on Friday, dealers said. The US Treasury yields rose on Friday as investors hesitated on the market's view that the US Federal Reserve will opt for interest rates cut later this year after a decline in the December US CPI data.

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

OUTLOOK

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

"On the upside, resistance is located around 81.50 to 81.80, where exporters who missed to book or have new exposures will look to sell and could be a cap for the pair (USDINR)," said Amit Pabari, managing director, CR Forex.

Market participants are now waiting for the Bank of Japan's monetary policy outcome on Wednesday, where the central bank is expected to alter its yield control policy. 

Dealers have pegged immediate technical support for the rupee at 81.80 a dollar.

The rupee is seen in a band of 81.30-81.80 a dollar during the day, dealers said.

India Rupee: Down as bks buy dlrs for oil cos, importers; volume thin

NEW DELHI – The rupee erased all earlier gains and fell against the greenback as state-owned and foreign banks stepped in to buy dollars for oil marketing companies and other importers, dealers said.

"Importers are buying (dollars) since morning. The overall sentiment is buying on dips (in dollar/rupee)," a dealer from a state-owned bank said.

Meanwhile, exporters remained on the sidelines and refrained from selling the greenback. Dealer said exporters might sell dollars at around 81.50-81.60 a dollar.

The rupee rose to a high of 81.2400 a dollar in early trade today, tracking weakness in the dollar index. The index has been on a falling spree after data on Thursday showed a decline in inflation in the US in December. 

At 1323 IST, the dollar index, which measures the strength of the greenback against a basket of six major currencies, was at 102.13 as against 102.20 on Friday. It was at 102.25 on Thursday. The index had fallen to 101.77 in early trade today.

Dealers said volumes in the currency market were lower than usual today, as markets in the US are closed today on account of Martin Luther King's birthday.

Some dealers said they expect the Reserve Bank of India to purchase dollars at around the key resistance level of 81.20 a dollar.

The unit is seen moving in a range of 81.00-81.40 per dollar, dealers said. (Ananya Chaudhuri)

India Rupee - Asia FX: Up as dlr index at 7-mo low, local shrs rise

MUMBAI - Most Asian currencies were up against the greenback as the dollar index touched a fresh seven-month low today, extending its fall from last week, following US consumer price data released on Thursday. 

The US headline inflation increased to 6.5% in December, the smallest rise since October 2021, after it had advanced to 7.1% in November. Market participants have now factored in a likely 25 basis points rate hike by the Federal Reserve in its February monetary policy meeting.

The dollar index also fell as the Japanese yen surged ahead of the Bank of Japan's monetary policy outcome on Wednesday, where the central bank is expected to alter its yield control policy. Markets have priced in for the Japanese central bank to step away from its ultra-easy monetary policy, which had on Friday caused the yield on Japan's benchmark 10-year government bonds to breach the central bank's new ceiling.  

At 1121 IST, the dollar index, which measures the strength of the greenback against a basket of six major currencies, was at 101.92 as against 102.20 on Friday. It was at 102.25 on Thursday. The index fell to 101.77 in early trade today.

Asian currencies were also supported by a surge in domestic share indices today. The Philippines peso was up 0.5% against the greenback as the country's benchmark PSEi index rose 2.17%. 

The South Korean won was 0.6% up against the dollar as the country's benchmark Kospi index rose 0.82%. (Aiswarya Santhosh)

India Rupee: A tad up as dlr index falls; importers' dlr buys weigh

MUMBAI – The rupee rose slightly against the greenback today as the dollar index touched a fresh seven-month low in early trade, dealers said. The US unit has been consistently weakening after US consumer prices on Thursday showed a decline in CPI for the first time in more than two and a half years in December.

The US headline inflation increased to 6.5% in December, the smallest rise since October 2021, after it had advanced to 7.1% in November. Market participants have now factored in a likely 25-basis-point rate hike by the Federal Reserve in its in February monetary policy.

The dollar index also fell as the Japanese yen surged ahead of the Bank of Japan's monetary policy outcome on Wednesday, where the central bank is expected to alter its yield control policy.

At 0920 IST, the dollar index, which measures the strength in the greenback against a basket of six major currencies, was at 101.88 as against 102.20 on Friday. It was at 102.25 on Thursday. The index fell to 101.77 in early trade today.

Meanwhile, some banks rushed to purchase dollars on behalf of importers who wanted to take advantage of relatively lower dollar/rupee levels, dealers said. This limited gains for the Indian unit, dealers said.

"Importers are likely to come aggressively around 81.20 (a dollar) level," said a dealer with a state-owned bank. "Exporters may remain on the sidelines for now." 

Dealers said volumes in the currency market may remain lower than usual today as markets are closed in the US today on account of Martin Luther King's birthday.

Dealers expect the Reserve Bank of India to purchase dollars to prevent the rupee's excessive appreciation. They have pegged immediate technical resistance for the rupee at 81.20 a dollar.

The unit is seen moving in a range of 81.00-81.40 per dollar, dealers said. (Aiswarya Santhosh)

India Rupee: Expected range for rupee - Jan 16

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 Tanima Banerjee

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 feedback@informistmedia.com

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