Informist, Thursday, Mar 3, 2022

By Arushi Jain

MUMBAI - The rupee settled sharply lower against the dollar for the third consecutive session today because several banks persistently purchased the US unit on behalf of oil marketing companies, noting sharply high crude oil prices, said dealers.

Today, the rupee settled at 75.9100 a dollar, the lowest level in over two months. It had settled at 75.7000 a dollar at 1530 IST on Wednesday.

Prices of crude oil peaked at a record 11-year high due to trade disruptions and shipping issues after several countries imposed sanctions on Russia, one of the largest oil producers in the world, amid the ongoing Ukraine crisis. 

A surge in crude prices followed the latest round of US sanctions on Russia's oil refining sector, which raised concerns that Russian oil and gas exports could be targeted next, as per reports.

At 1610 IST, the May contract of Brent crude on the Intercontinental Exchange was at $115.23 per barrel, against the previous close of $112.93 per bbl. Prices had risen to as much as $119.84 per bbl earlier today.

Moreover, global strength in the safe-haven US currency led banks to place fresh bets in favour of the dollar, on behalf of traders, which also dented sentiment for the Indian rupee, said dealers.

At 1610 IST, the dollar index, which measures the strength in the US currency against a basket of six major currencies, was at 97.59, against 97.39 on Wednesday. It was at 97.41 on Tuesday.

A slump in domestic benchmark equity indices also dented sentiment for the local unit, said dealers. The Nifty 50 and the Sensex ended nearly 0.7% lower each.

Global and domestic share indices rebounded in early trade today after US Federal Reserve Chair Jerome Powell on Wednesday signalled a patient approach to hiking interest rates, said dealers. In a testimony to the US House of Representatives Financial Services Committee, Powell said he was inclined to support a rate increase of 25 basis point in March, putting to rest some concerns about the potential of a more aggressive rate hike.

The local currency had fallen to as much as 75.9700 a dollar today.

However, any further losses in the local currency were prevented as state-owned banks persistently sold the US unit on behalf of exporters, who wanted to take advantage of relatively higher dollar/rupee levels, according to dealers.

Some dealers said a part of these dollar sales were on behalf of the Reserve Bank of India, which wanted to prevent any sharp depreciation in the local currency beyond the 76-a-dollar mark. 

"The RBI constantly intervened in the currency markets today between the 75.81-75.95/$1 levels," said a dealer with a private bank. "The central bank sold (dollars) aggressively at these levels which is why we saw a sharp move from 75.97/$1 to 75.88/$1." 

FORWARDS

The premium on the dollar/rupee forwards contract fell today as banks sold forward dollar contracts on behalf of exporters, dealers said.

On an annualised basis, the premium on the one-year, exact-period dollar/rupee contract was at 4.05%, against 4.08% on Wednesday. The premium was 307.63 paise compared with 310.32 paise on Wednesday.

OUTLOOK

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

Any sharp depreciation in the rupee, they said, may be prevented as banks are expected to sell dollars on behalf of exporters and the central bank near the key technical support levels of 75.90-76.00 a dollar.

"Overall, sentiment for the rupee is very negative but since the RBI is protecting the 76/$1 levels, the rupee is not expected to depreciate beyond it," said a dealer with another private bank.

During the day, the rupee is seen in range of 75.5000-76.0000 a dollar.

India Rupee - World FX: Euro falls on econ growth worries; dollar up

NEW DELHI – The euro fell 0.3% against the dollar due to concerns that Russia's invasion of Ukraine will hurt economic growth in Europe. 

Europe's consumer price index hit a record 5.8% year-on-year in February, according to data released on Wednesday. 

The dollar remained firm against other major currencies in European trade due to risk aversion amid the ongoing Russia-Ukraine crisis. 

At 1530 IST, the dollar index, which measures the strength in the US currency against a basket of six major currencies, was at 97.61, against 97.39 on Wednesday. It was at 97.41 on Tuesday.

The Australian dollar was up 0.1% against the greenback as prices of Australian exports such as coal, gas and grains surged on signs that sanctions against Russia were severely disrupting global supplies.

The pound sterling and the New Zealand dollar fell 0.2% and 0.3% against the greenback, respectively. (Pratiksha) 

 India Rupee: Down, oil cos buy dlr as Brent crude tops $119-bbl mark

NEW DELHI – The rupee fell further against the dollar today because several banks persistently purchased dollars on behalf of oil marketing companies as Brent crude oil prices surged beyond the $119-a-barrel mark, dealers said.

Prices of crude oil peaked at a record 11-year high due to trade disruption and shipping issues after several countries imposed sanctions on Russia, one of the largest oil producers in the world, amid the ongoing Ukraine crisis. 

At 1350 IST, the May contract of Brent crude on the Intercontinental Exchange was at $117.82 per bbl, against the previous close of $112.93 per bbl. Prices had risen to as much as $119.84 per bbl earlier today.

Moreover, the dollar remained firm against major currencies in European trade, which further weighed on the Indian unit, said dealers. 

At 1350 IST, the dollar index, which measures the strength in the US currency against a basket of six major currencies, was at 97.52, against 97.39 on Wednesday. It was at 97.41 on Tuesday.

On the flip side, some state-owned banks stepped in to sell dollars on behalf of exporters who wanted to take advantage of relatively higher dollar/rupee levels of around 75.80 a dollar, which limited further losses in the local unit, dealers said.

Dealers have pegged strong key technical support for the rupee at 75.90 a dollar.

For the rest of the day, the rupee is seen at 75.5000-75.9000 a dollar.  (Pratiksha and Arushi Jain)

India Rupee: Rises as banks sell dlrs for exporters, local shares up

NEW DELHI – The rupee rose after recovering all losses against the dollar today because some banks sold the greenback on behalf of exporters at relatively higher dollar/rupee levels of around 75.75-75.70 a dollar, said dealers.

Moreover, a rise in domestic and global share indices after US Federal Reserve Chair Jerome Powell signalled a patient approach to hiking interest rates, also aided sentiment for the Indian unit, said dealers.

In a testimony to the US House of Representatives Financial Services Committee on Wednesday, Powell said he is inclined to support a rate increase of 25 basis point in March, putting to rest some concerns about the potential for a more aggressive rate hike.

At 1057 IST, the Nifty 50 and Sensex were over 0.1% higher each.

Meanwhile, the US unit remained firm against major currencies in reaction to Powell's comments, which weighed on sentiment for the local unit, dealers said.

At 1057 IST, the dollar index, which measures the strength in the US currency against a basket of six major currencies, was at 97.47, against 97.39 on Wednesday. It was at 97.41 on Tuesday.

For the rest of the day, the rupee is seen at 75.4000-75.8000 a dollar.  (Pratiksha)

India Rupee - Asia FX: Largely steady; dlr firm on Powell's comments

MUMBAI – Asian currencies were largely steady against the dollar today as the US unit remained firm after US Federal Reserve Chair Jerome Powell signalled at a patient approach to hiking interest rates.

In a testimony to the US House of Representatives Financial Services Committee on Wednesday, Powell said he is inclined to support a rate increase of 25 basis points in March, putting to rest some concerns about the potential for a more aggressive rate hike.

"We’re going to avoid adding uncertainty to what is already an extraordinarily challenging and uncertain moment," Powell said. 

At 0936 IST, the dollar index, which measures the strength in the US currency against a basket of six major currencies, was at 97.53, against 97.39 on Wednesday. It was at 97.41 on Tuesday.

The Chinese yuan was also steady against the dollar even though the Caixin services purchasing managers index in China fell to 50.2 in February from 51.4 in January.

However, the reading was above 50, which separates month-to-month activity expansion from contraction.

The South Korean won rose nearly 0.2% against the dollar today.  (Arushi Jain)

India Rupee: Expected range for rupee - Mar 3

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

(Pratiksha)

End

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

Edited by Avishek Dutta

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