Informist, Wednesday, Mar 2, 2022

By Arushi Jain

MUMBAI - The rupee today closed at its lowest level against the dollar in over two months as several banks persistently purchased the US unit on behalf of oil marketing companies, noting sharply high crude oil prices, said dealers.

"There was aggressive buying (of dollars) by oil importers, especially in the last few hours of trade, due to which we saw considerable depreciation (in the rupee)," said a dealer with a state-owned bank.

A large state-owned bank was said to be the major buyer of dollars today, according to dealers.

Today, the rupee settled at 75.7000 a dollar, the lowest since Dec 20. It had settled at 75.3400 a dollar at 1530 IST on Monday. Domestic markets were shut on Tuesday on account of Maha Shivratri.

The Indian unit depreciated nearly 1% against the dollar last month.

With Russia intensifying its attacks on Ukraine, concern has mounted over further economic disruption and more persistent commodity pricing pressures. Prices of crude oil surged to their highest level since 2014 on Tuesday.

A global agreement to release crude reserves failed to calm crude oil prices. Members of the International Energy Agency, which includes the US and Japan, agreed to release 60 mln barrels of crude from their reserves in an attempt to limit the increase in prices.

At 1612 IST, the April contract of Brent crude on the Intercontinental Exchange was at $110.33 per bbl, against the previous close of $104.97 per bbl. Prices had risen to as much as $113.02 per bbl earlier today.

Moreover, a slump in domestic benchmark equity indices also dented sentiment for the local unit, said dealers. The Nifty 50 and the Sensex ended nearly 1.1% and 1.4% lower, respectively.

Dealers said global strength in safe-haven currencies such as the US dollar and the Japanese yen also weighed on sentiment for emerging market assets, including the Indian rupee. Investors worldwide flocked to safe haven assets after intensifying Russian bombardment of Ukraine's cities heightened global geopolitical uncertainty, said dealers.

At 1612 IST, the dollar index, which measures the strength in the US currency against a basket of six major currencies, was at 97.63, against 97.41 on Tuesday. It was at 96.71 on Monday.  

The local currency had fallen to as much as 75.8575 a dollar today.

During early trade, the local currency recovered some losses against the dollar as banks stepped in to sell 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 also on behalf of the Reserve Bank of India, which wanted to prevent sharp depreciation in the local currency. 

As a result, the rupee touched the day's high of 75.5600 a dollar.

FORWARDS

The premium on the dollar/rupee forwards contract rose slightly today as banks bought forward dollar contracts on behalf of importers, dealers said.

On an annualised basis, the premium on the one-year, exact-period dollar/rupee contract was at 4.08%, against 4.07% on Monday. The premium was 310.32 paise compared with 306.61 paise on Monday.

OUTLOOK

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

Dealers said sharply elevated prices of Brent crude oil are expected to dampen sentiment for the local currency.

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

During the day, the rupee is seen in range of 75.5000-75.9500 a dollar.

India Rupee - World FX:Dollar, yen rise as Russian attack intensifies

NEW DELHI – Safe haven currencies such as the US dollar and the Japanese yen, rallied in European trade today as the Russian bombardment of Ukraine's cities increased in intensity and heightened global geopolitical uncertainty.

Seven days into the invasion, Russian forces attempted to encircle and subdue Ukrainian cities with escalating bombardments today, according to reports.

At 1545 IST, the dollar index, which measures the strength in the US currency against a basket of six major currencies, was at 97.71, against 97.41 on Tuesday. It was at 96.71 on Monday.  

The euro and pound sterling slipped 0.3% and 0.1% against the dollar, respectively. 

The Australian dollar rose nearly 0.2% against the greenback as data released by the Australian Bureau of Statistics today showed Australia's GDP jumped 3.4% in the Oct-Dec quarter from Jul-Sep, when it slid 1.9%.  (Pratiksha)

India Rupee: Falls as dollar index rises, domestic equities slump

NEW DELHI – The rupee fell sharply against the dollar today because the US unit rose against other major currencies as investors flocked to safe haven assets amid the ongoing Russia-Ukraine conflict, said dealers.

At 1050 IST, the dollar index, which measures the strength in the US currency against a basket of six major currencies, was at 97.43, against 97.41 on Tuesday. It was at 96.71 on Monday.    

A slump in domestic and global share indices in the wake of the Russia-Ukraine conflict continued to weigh on risk appetite, further weighing on the Indian unit, said dealers.

At 1050 IST, the Nifty 50 and Sensex were nearly 1.3% and 1.6% lower, respectively.

On the flip side, some banks stepped in to sell dollars on behalf of exporters who wanted to take advantage of relatively higher dollar/rupee levels of around 75.76-75.70 a dollar, which limited further losses in the local unit, said dealers.

"Until and unless the rupee doesn't break the 75.90 (a dollar) level, we might see selling (of dollars) on rise," said a dealer with a state-owned bank.

For the rest of the day, the rupee is seen at 75.4000-75.9000 a dollar.  (Pratiksha)

India Rupee: Expected range for rupee - Mar 2

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)

India Rupee - Asia FX: Most units dn; dlr, oil up amid Ukraine crisis

MUMBAI – Most Asian currencies fell against the dollar today because escalating conflict between Russia and Ukraine hit sentiment globally and led investors towards haven assets.

Russia warned Kyiv residents to flee their homes and rained rockets on the city of Kharkiv, as Russian commanders intensified their bombardment of Ukrainian urban areas, in a shift of tactics.

The dollar index remained sharply elevated. At 0930 IST, the dollar index, which measures the strength in the US currency against a basket of six major currencies, was at 97.43, against 97.41 on Tuesday. It was at 96.71 on Monday.

Oil prices rose sharply on Tuesday due on about disruption in supply, amid Russia's invasion of Ukraine, which also weighed on Asian currencies today.

The South Korean won was the major laggard and fell nearly 0.5% against the dollar today.

However, bucking the trend, the Thai Baht rose slightly by 0.1% against the dollar.

Investors now await US Federal Reserve Chairman Jerome Powell’s testimony before Congress later today and on Thursday for any indications if the Fed will be less aggressive in raising interest rates going forward as the Ukraine conflict continues.  (Arushi Jain)

End

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

Edited by Avishek Dutta

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