Informist, Thursday, Dec 1, 2022

By Aiswarya Santhosh and Pratiksha

MUMBAI – Even as the rupee ended sharply higher against the dollar today, it erased a significant portion of its gains as oil marketing companies and importers persistently purchased the greenback, dealers said.

After touching a high of 80.9825 a dollar during the day, the rupee settled at 81.2150 a dollar, as against 81.4225 on Wednesday. 

The rupee opened the day 35 paise stronger at 81.0700 a dollar due to a sharp overnight fall in the dollar index after US Federal Reserve Chair Jerome Powell said the central bank may slow down the pace of rate hikes, according to dealers. 

Powell, at the Brookings Institution in Washington, said that the US central bank could scale back the pace of its interest rate hikes "as soon as December." However, he also stressed that the smaller hike shouldn't be taken as a sign that the Fed will let up on its fight against inflation anytime soon.

Fed funds futures traders are now pricing for the fed funds rates to peak at 4.95% in May, compared with expectations for a top of 5.06% in June.

The US central bank is expected to raise rates by an additional 50 basis points when it meets on Dec 13-14.

The dollar index, which measures the strength of the greenback against a basket of six major currencies, slumped about 1% after Powell's speech. The index fell over 5% in November, its largest monthly percentage decline since July 2010.

At 1710 IST, the dollar index was at 105.56 compared with 105.95 on Wednesday. It was at 106.82 on Tuesday.

As the rupee ascended to the day's high of 80.9825, foreign banks stepped in to buy dollars for oil companies and importers, noting attractive dollar/rupee levels, dealers said. 

"Since crude prices also shot up over 3% overnight, there was good demand from oil importers today," said a dealer with a big state-owned bank. "Importers also found the above 81 levels lucrative to book profits."

On Wednesday, crude oil prices rose over 3% as China reported fewer daily COVID-19 cases compared with Tuesday, which sparked hopes of reopening of the world's second-largest economy, improving the global demand outlook for crude oil. 

Market participants await the Group of Seven nations' decision on a price cap on Russian oil and the Organization of the Petroleum Exporting Countries meeting on Sunday for further cues on oil prices.

At 1710 IST, the February contract of Brent crude oil on the Intercontinental Exchange was at $87.10 a barrel against $86.86 a bbl on Wednesday. Prices were at $83.03 a bbl on Tuesday.

Meanwhile, some banks sold dollars on behalf of exporters, on expectations that the Indian unit may appreciate further in the coming days, dealers said. This provided support to the Indian unit.

"From yesterday, we have seen a sharp rise of 40-50 paise in the rupee, so some exporters are in panic mode," said a dealer with a private bank. 

In the past couple of weeks, exporters had been refraining from selling dollars on hopes that the rupee will fall to 82.00 a dollar. On the other hand, a few exporters are still on the sidelines and waiting for 81.30-81.40 levels to sell dollars, dealers said.

Rise in domestic share indices also supported sentiment for the rupee. Both the Nifty 50 and the Sensex closed 0.3% higher each. 

FORWARDS 

Premiums on dollar/rupee forwards rose today, tracking a sharp fall in US Treasury yields on Wednesday, dealers said.

US Treasury yields fell sharply after Fed Chair Jerome Powell indicated the central bank could slow the pace of its rate hikes at its next policy review this month.

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

Premium on the one-year, exact-period dollar/rupee forward contract was at 157.04 paise against 153.79 paise at Wednesday's close. On an annualised basis, the premium was at 1.93% against 1.88% on Wednesday.

OUTLOOK

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

"I think once the rupee settles down after the sharp movement today, we'll get a better idea of how the importers and exporters will position their bets," said a dealer with a state owned bank. "For now, it seems like a complete sentiment reversal for emerging market currencies."

The market is now awaiting US jobs data to be released on Friday for further cues on the Fed's monetary policy going ahead. 

Dealers peg technical support for the rupee at 81.30 a dollar and long-term resistance at 80.90 a dollar.

During the day, the rupee is seen at 80.90-81.40 a dollar.

India Rupee - World FX: Dlr dn post Fed Powell's comments; yen up 1.2%

MUMBAI – The dollar slumped against all major currencies after Federal Reserve Chair Jerome Powell on Wednesday said that the US central bank may slow down the pace of its rate hikes as soon as this month.

"It makes sense to moderate the pace of our rate increases as we approach the level of restraint that will be sufficient to bring inflation down," he said at the Brookings Institution.

At 1553 IST, the dollar index was at 105.46 compared with 105.95 on Wednesday. It was at 106.82 on Tuesday.

The yen was the best-performing currency throughout the day. The Japanese unit was 1.2% up against the dollar and hit a high of 135.81 for the first time since Aug 23.  

The euro was up 0.4% against the dollar as Eurozone inflation fell for the first time in 17 months. The Eurozone annual inflation came down to 10.0% in November from 10.6 in October, which fuelled speculations of slow down in the pace of European Central Bank's rate hikes.

The pound sterling was also 0.6% up as a fall in the dollar index has boosted the risk sentiment for European currencies. (Kabir Sharma)

India Rupee: Pares some gains as foreign banks buy dlrs for oil cos

NEW DELHI – The rupee pared some gains against the greenback as foreign banks bought dollars on behalf of oil marketing companies, dealers said.

"Importers started buying (dollars) around 81.00 (a dollar) level," said a dealer from a state-owned bank. "Maybe foreign banks are buying."

Further, crude oil price rose over 3% on Wednesday as China reported fewer daily COVID-19 cases compared with Tuesday, and this sparked hopes of reopening of the world's second-largest economy, improving the global demand outlook for crude oil. 

At 1332 IST, the February contract of Brent crude oil on the Intercontinental Exchange was at $86.51 a barrel, a little lower than $86.97 a bbl on Wednesday, but still up from Tuesday. Prices were at $83.03 a bbl on Tuesday.

Meanwhile, banks sold dollars for exporters on expectations that the Indian unit may appreciate further in the coming days, dealers said. This supported the rupee.  

In the past couple of weeks, exporters had been refraining from selling dollars on hopes that the rupee will fall to 82.00 a dollar.

Some exporters sold the greenback with a sense of urgency today, dealers said. On the other hand, a few exporters are still on the sidelines and waiting for 81.30-81.40 levels to sell dollars, dealers said.

The immediate technical support for the rupee is pegged at 81.50 a dollar and resistance at 80.90, dealers said.

The rupee is expected to trade in the 80.90-81.40 range for the rest of the day, dealers said. (Ananya Chaudhuri)

India Rupee: Surges as dlr slumps globally after Fed Powell's speech

MUMBAI – The rupee rose sharply against the dollar today as the greenback slumped, following US Federal Reserve Chairman Jerome Powell's comments, which suggested that the US central bank may slow down the pace of its rate hikes as soon as this month, dealers said. 

"It makes sense to moderate the pace of our rate increases as we approach the level of restraint that will be sufficient to bring inflation down," Powell said at the Brookings Institution in Washington. 

The dollar index, which measures the strength in the greenback against a basket of six major currencies, slumped about 1% after Powell's speech and suffered its largest monthly decline since July 2010.

At 0954 IST, the dollar index was at 105.69 compared with 105.95 on Wednesday. It was at 106.82 on Tuesday.

Gains in domestic and Asian equities also supported the Indian currency, dealers said. At 0954 IST, both the Nifty 50 and Sensex were up 0.5% each.

"Exporters may sell on every uptick around these levels since they've been on the sidelines for quite some time," a dealer with a state-owned bank said. "However, they may remain watchful of the RBI's action around these levels as it may intervene (through dollar buys) to contain volatility." 

The rupee is expected to trade in the 80.80-81.40 range for the rest of the day, dealers said. (Kabir Sharma and Pratiksha)

India Rupee: Expected range for rupee - Dec 1

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

(Ananya Chaudhuri)

End

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

Edited by Aditya Sakorkar

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. 2022. All rights reserved.

Informist, Thursday, Dec 1, 2022

By Aiswarya Santhosh and Pratiksha

MUMBAI – Even as the rupee ended sharply higher against the dollar today, it erased a significant portion of its gains as oil marketing companies and importers persistently purchased the greenback, dealers said.

After touching a high of 80.9825 a dollar during the day, the rupee settled at 81.2150 a dollar, as against 81.4225 on Wednesday. 

The rupee opened the day 35 paise stronger at 81.0700 a dollar due to a sharp overnight fall in the dollar index after US Federal Reserve Chair Jerome Powell said the central bank may slow down the pace of rate hikes, according to dealers. 

Powell, at the Brookings Institution in Washington, said that the US central bank could scale back the pace of its interest rate hikes "as soon as December." However, he also stressed that the smaller hike shouldn't be taken as a sign that the Fed will let up on its fight against inflation anytime soon.

Fed funds futures traders are now pricing for the fed funds rates to peak at 4.95% in May, compared with expectations for a top of 5.06% in June.

The US central bank is expected to raise rates by an additional 50 basis points when it meets on Dec 13-14.

The dollar index, which measures the strength of the greenback against a basket of six major currencies, slumped about 1% after Powell's speech. The index fell over 5% in November, its largest monthly percentage decline since July 2010.

At 1710 IST, the dollar index was at 105.56 compared with 105.95 on Wednesday. It was at 106.82 on Tuesday.

As the rupee ascended to the day's high of 80.9825, foreign banks stepped in to buy dollars for oil companies and importers, noting attractive dollar/rupee levels, dealers said. 

"Since crude prices also shot up over 3% overnight, there was good demand from oil importers today," said a dealer with a big state-owned bank. "Importers also found the above 81 levels lucrative to book profits."

On Wednesday, crude oil prices rose over 3% as China reported fewer daily COVID-19 cases compared with Tuesday, which sparked hopes of reopening of the world's second-largest economy, improving the global demand outlook for crude oil. 

Market participants await the Group of Seven nations' decision on a price cap on Russian oil and the Organization of the Petroleum Exporting Countries meeting on Sunday for further cues on oil prices.

At 1710 IST, the February contract of Brent crude oil on the Intercontinental Exchange was at $87.10 a barrel against $86.86 a bbl on Wednesday. Prices were at $83.03 a bbl on Tuesday.

Meanwhile, some banks sold dollars on behalf of exporters, on expectations that the Indian unit may appreciate further in the coming days, dealers said. This provided support to the Indian unit.

"From yesterday, we have seen a sharp rise of 40-50 paise in the rupee, so some exporters are in panic mode," said a dealer with a private bank. 

In the past couple of weeks, exporters had been refraining from selling dollars on hopes that the rupee will fall to 82.00 a dollar. On the other hand, a few exporters are still on the sidelines and waiting for 81.30-81.40 levels to sell dollars, dealers said.

Rise in domestic share indices also supported sentiment for the rupee. Both the Nifty 50 and the Sensex closed 0.3% higher each. 

FORWARDS 

Premiums on dollar/rupee forwards rose today, tracking a sharp fall in US Treasury yields on Wednesday, dealers said.

US Treasury yields fell sharply after Fed Chair Jerome Powell indicated the central bank could slow the pace of its rate hikes at its next policy review this month.

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

Premium on the one-year, exact-period dollar/rupee forward contract was at 157.04 paise against 153.79 paise at Wednesday's close. On an annualised basis, the premium was at 1.93% against 1.88% on Wednesday.

OUTLOOK

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

"I think once the rupee settles down after the sharp movement today, we'll get a better idea of how the importers and exporters will position their bets," said a dealer with a state owned bank. "For now, it seems like a complete sentiment reversal for emerging market currencies."

The market is now awaiting US jobs data to be released on Friday for further cues on the Fed's monetary policy going ahead. 

Dealers peg technical support for the rupee at 81.30 a dollar and long-term resistance at 80.90 a dollar.

During the day, the rupee is seen at 80.90-81.40 a dollar.

India Rupee - World FX: Dlr dn post Fed Powell's comments; yen up 1.2%

MUMBAI – The dollar slumped against all major currencies after Federal Reserve Chair Jerome Powell on Wednesday said that the US central bank may slow down the pace of its rate hikes as soon as this month.

"It makes sense to moderate the pace of our rate increases as we approach the level of restraint that will be sufficient to bring inflation down," he said at the Brookings Institution.

At 1553 IST, the dollar index was at 105.46 compared with 105.95 on Wednesday. It was at 106.82 on Tuesday.

The yen was the best-performing currency throughout the day. The Japanese unit was 1.2% up against the dollar and hit a high of 135.81 for the first time since Aug 23.  

The euro was up 0.4% against the dollar as Eurozone inflation fell for the first time in 17 months. The Eurozone annual inflation came down to 10.0% in November from 10.6 in October, which fuelled speculations of slow down in the pace of European Central Bank's rate hikes.

The pound sterling was also 0.6% up as a fall in the dollar index has boosted the risk sentiment for European currencies. (Kabir Sharma)

India Rupee: Pares some gains as foreign banks buy dlrs for oil cos

NEW DELHI – The rupee pared some gains against the greenback as foreign banks bought dollars on behalf of oil marketing companies, dealers said.

"Importers started buying (dollars) around 81.00 (a dollar) level," said a dealer from a state-owned bank. "Maybe foreign banks are buying."

Further, crude oil price rose over 3% on Wednesday as China reported fewer daily COVID-19 cases compared with Tuesday, and this sparked hopes of reopening of the world's second-largest economy, improving the global demand outlook for crude oil. 

At 1332 IST, the February contract of Brent crude oil on the Intercontinental Exchange was at $86.51 a barrel, a little lower than $86.97 a bbl on Wednesday, but still up from Tuesday. Prices were at $83.03 a bbl on Tuesday.

Meanwhile, banks sold dollars for exporters on expectations that the Indian unit may appreciate further in the coming days, dealers said. This supported the rupee.  

In the past couple of weeks, exporters had been refraining from selling dollars on hopes that the rupee will fall to 82.00 a dollar.

Some exporters sold the greenback with a sense of urgency today, dealers said. On the other hand, a few exporters are still on the sidelines and waiting for 81.30-81.40 levels to sell dollars, dealers said.

The immediate technical support for the rupee is pegged at 81.50 a dollar and resistance at 80.90, dealers said.

The rupee is expected to trade in the 80.90-81.40 range for the rest of the day, dealers said. (Ananya Chaudhuri)

India Rupee: Surges as dlr slumps globally after Fed Powell's speech

MUMBAI – The rupee rose sharply against the dollar today as the greenback slumped, following US Federal Reserve Chairman Jerome Powell's comments, which suggested that the US central bank may slow down the pace of its rate hikes as soon as this month, dealers said. 

"It makes sense to moderate the pace of our rate increases as we approach the level of restraint that will be sufficient to bring inflation down," Powell said at the Brookings Institution in Washington. 

The dollar index, which measures the strength in the greenback against a basket of six major currencies, slumped about 1% after Powell's speech and suffered its largest monthly decline since July 2010.

At 0954 IST, the dollar index was at 105.69 compared with 105.95 on Wednesday. It was at 106.82 on Tuesday.

Gains in domestic and Asian equities also supported the Indian currency, dealers said. At 0954 IST, both the Nifty 50 and Sensex were up 0.5% each.

"Exporters may sell on every uptick around these levels since they've been on the sidelines for quite some time," a dealer with a state-owned bank said. "However, they may remain watchful of the RBI's action around these levels as it may intervene (through dollar buys) to contain volatility." 

The rupee is expected to trade in the 80.80-81.40 range for the rest of the day, dealers said. (Kabir Sharma and Pratiksha)

India Rupee: Expected range for rupee - Dec 1

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

(Ananya Chaudhuri)

End

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

Edited by Aditya Sakorkar

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. 2022. All rights reserved.