Informist, Monday, Sep 11, 2023

By Kabir Sharma

MUMBAI – The rupee closed off highs against the dollar as banks stepped up their dollar purchases on behalf of oil marketing companies during the last hour of trade, dealers said. 

"Today, we thought figure (83.00) will be good resistance, but because of the oil buying it (rupee) broke the figure," a dealer at a state—owned bank said. 

After appreciating sharply on Friday, the Indian currency fell below the 83 a dollar mark today and ended at 83.0300 against the US unit. The rupee had settled at 82.9450 a dollar on Friday. 

The rupee opened largely steady against the dollar as traders exercised caution ahead of release of US CPI data on Wednesday, dealers said. The US data is expected to provide further guidance about the Federal Reserve's monetary policy going forward. 

The US CPI is expected to rise to 3.6% in August from 3.2% in July, according to a forecast by Investing.com. 

According to the CME FedWatch tool, 93% of Fed fund future traders are factoring in a pause at the Fed's monetary policy review meeting during Sep 19-20, while 7% expect a 25-basis-point rate hike.

The dollar index fell today on the back of a surge in the Japanese yen. The yen rose over 1% against the dollar as Bank of Japan Governor Kazuo Ueda said that the central bank could end its negative interest rate policy when its 2% inflation target seems achievable, the Yomiuri newspaper reported on Saturday.

"Once we're convinced Japan will see sustained rises in inflation accompanied by wage growth, there are various options we can take," Ueda said. "If we judge that Japan can achieve its inflation target even after ending negative rates, we'll do so," he said.

The BoJ currently guides short-term interest rates at -0.1% under its negative rate policy. It also caps the 10-year government bond yield around zero as part of its endeavour to sustainably achieve its target while keeping the economy afloat.

At 1616 IST, the dollar index, which measures the strength of the greenback against a basket of six major currencies, was at 104.67 as against 105.1 on Friday. It was at 105.06 on Thursday. 

Some banks sold the greenback for exporters who feared an appreciation in the Indian unit post the release of US CPI data, which they expect to be lower than view. 

"Exporters started coming in around 82.90-82.91 (a dollar) level. They might be assuming in case US CPI comes softer, rupee may go up," a dealer at state-owned bank said.

An improved risk sentiment for emerging market currencies also supported the Indian unit, dealers said. 

The risk sentiment improved, helped by a rally in Chinese equities after an uptick in the country’s inflation showed tentative signs of demand in the world’s second-largest economy. China’s CPI increased 1.0% on year in August, reversing a drop of 0.3% reported in July.

A rise in local share indices also supported the rupee as the Nifty 50 index broke past the crucial 20,000 points mark for the first time ever, dealers said. Today, the Nifty 50 and the Sensex ended 0.9% and 0.8% higher, respectively.  

However, during the last hour of trade the rupee broke the psychologically crucial 83-a-dollar-mark as banks purchased the greenback on behalf of oil marketing companies, dealers said. Oil companies bought the commodity fearing further appreciation in its prices. 

Crude oil prices gained as much as 1% on Friday, touching a nine-month high, as a bleak supply outlook continued to weigh on investors' sentiment after the voluntary output cut by Saudi Arabia and Russia. Last week, the two countries extended their voluntary oil production cuts--amounting to a combined 1.3 mln barrels of crude--through the end of this year.

At 1616 IST, the October contract of Brent crude oil on the Intercontinental Exchange was at $90.32 a bbl as against $90.65 a bbl on Friday. It was at $89.92 a bbl on Thursday.

FORWARDS

Premiums on one-year dollar/rupee forwards ended higher on the back of likely forward dollar purchases by importers dealers said.

Premiums also rose tracking a slight easing of US Treasury yields during Indian market hours today, dealers said.  

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

The premium on the one-year dollar/rupee contract was 147.33 paise, against 144.42 paise on Friday. On an annualised basis, the premium was at 1.77%, against 1.74% the previous close.

OUTLOOK

On Tuesday, the rupee will take cues from movement in the dollar index ahead of the release of US CPI data, dealers said. The Indian currency may also track crude oil prices, they said.

Market participants now await US CPI data, scheduled for release on Wednesday, for further cues on the US Federal Reserve's next monetary policy move. 

Dealers have pegged key technical support for the rupee at 83.30 a dollar. During the day, the rupee is seen in the range of 82.80-83.30 a dollar.

India Rupee - World FX: Yen rises 1% on BoJ Governor Ueda's comments

India Rupee - World FX: Yen rises 1% on BoJ Governor Ueda's comments

MUMBAI – The Japanese yen rose 1% against the dollar as Bank of Japan Governor Kazuo Ueda said that the central bank could end its negative interest rate policy when its 2% inflation target seems achievable, the Yomiuri newspaper reported on Saturday.

"Once we're convinced Japan will see sustained rises in inflation accompanied by wage growth, there are various options we can take," Ueda said. "If we judge that Japan can achieve its inflation target even after ending negative rates, we'll do so," he said.

The BoJ currently guides short-term interest rates at -0.1% under its negative rate policy. It also caps the 10-year government bond yield around zero as part of its endeavour to sustainably achieve its target while keeping the economy afloat.

The pound sterling rose 0.4% against the greenback ahead of the release of UK's labour market report for July, which will be published on Tuesday at 1130 IST.

The dollar was down ahead of the release of US CPI data on Wednesday. The US consumer price index is expected to rise to 3.6% in August from 3.2% in July, according to a forecast by Investing.com.

At 1427 IST, the dollar index, which measures the strength of the greenback against a basket of six major currencies, was at 104.65 as against 105.1 on Friday. It was at 105.06 on Thursday.  (Kabir Sharma)

India Rupee: Up on exporters' dlr sales; traders wary before US CPI

MUMBAI – The rupee rose against the dollar as banks sold the greenback on behalf of exporters, dealers said. However, the rupee remained in a narrow range against the dollar as market participants were wary of placing large bets ahead of the release of US inflation data, due Wednesday, they said. 

"Not seeing much movement now, some exporters are there and some oilers on the other side but overall it is range bound," a dealer at a big state-owned bank said. 

The US consumer price index is expected to rise to 3.6% in August from 3.2% in July, according to a forecast by Investing.com. 

The US CPI data is expected to provide cues about the Federal Reserve's monetary policy path going forward. The data assumes significance, especially in light of the central bank's comments at its last policy meeting that it is going to be data-dependent moving forward.

According to the CME FedWatch tool, 93% of Fed fund future traders are factoring in a pause at the Fed's monetary policy review meeting during Sep 19-20, while 7% expect a 25-basis-point rate hike.

Some banks bought the greenback on behalf of oil marketing companies who feared further appreciation in the price of the commodity, which weighed on the Indian unit, dealers said. 

Crude oil prices gained as much as 1% on Friday, touching a nine-month high, as a bleak supply outlook continued to weigh on investors' sentiment after the voluntary output cut by Saudi Arabia and Russia. Last week, the two countries extended their voluntary oil production cuts--amounting to a combined 1.3 mln barrels of crude--through the end of this year.

An improved risk sentiment for emerging market currencies also supported the Indian unit, dealers said. 

The risk sentiment improved helped by a rally in Chinese equities after an uptick in the country’s inflation showed tentative signs of demand in the world’s second-largest economy. China’s CPI increased 1.0% on year in August, reversing a drop of 0.3% reported in July.

Dealers see key technical resistance for the rupee at 82.80 a dollar. During the day, the rupee is seen in the range of 82.80-83.20 a dollar.  (Kabir Sharma)

India Rupee: Largely steady on caution before US CPI; dlr index down

MUMBAI - The rupee was largely steady against the dollar as traders exercised caution ahead of release of US CPI data on Wednesday, dealers said. The US data is expected to provide further guidance about the Federal Reserve's monetary policy going forward. 

The highly-anticipated headline inflation figures are now all the more important as the US central bank said in previous policy meeting that they're going to be data-dependent, moving forward.

According to CME FedWatch tool, 93% of Fed fund future traders are factoring in a pause in the Fed's next monetary policy review meeting on Sep 19-20, while 7% expect a 25-basis-point rate hike.

Meanwhile, the dollar index fell in early trade today that provided support to the local unit, dealers said. At 0934 IST, the dollar index, which measures the strength of the greenback against a basket of six major currencies, was at 104.79 as against 105.1 on Friday. It was at 105.06 on Thursday.

"The dollar index fall was not so much, and we're expecting it (rupee) move in the range of 

82.85-83.05 (a dollar)," a dealer at state-owned bank said. "No major news today, so we're not expecting anything much adverse or favourable." 

A rise in local share indices also supported the Indian currency, dealers said. At 0920 IST, both the benchmark Nifty 50 and Sensex were 0.4% higher.

Dealers see key technical resistance for the rupee at 82.80 a dollar. During the day, the rupee is seen in the range of 82.80-83.20 a dollar.  (Ananya Chaudhuri)

India Rupee: Expected range for rupee - Sep 11

MUMBAI - 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)

India Rupee - Asia FX: Most rises as dlr index falls ahead of US CPI

MUMBAI - Most Asian currencies rose against the dollar today as the dollar index fell in early trade, ahead of the release of the US CPI data on Wednesday. The US CPI is expected to provide further guidance about the Federal Reserve's monetary policy going forward. 

The highly anticipated US headline inflation figures are now all the more important as the US central bank said in the previous policy meeting that they're going to be data-dependent moving forward.

According to CME FedWatch tool, 93% of Fed fund future traders are factoring in a pause in the Fed's next monetary policy review meeting on Sep 19-20, while 7% expect a 25-basis-point rate hike.

At 0825 IST, the dollar index, which measures the strength of the greenback against a basket of six major currencies, was at 104.79 as against 105.1 on Friday. It was at 105.06 on Thursday.

Asian currencies rose in the range of 0.1-0.4% against the greenback with the Thai baht rising the most against the dollar.

Bucking the trend, the Indonesian rupiah fell 0.2% against the US currency amid ongoing talks about Indonesia's intent to be part of the Organization of Economic Co-operation and Development. (Ananya Chaudhuri)

End

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

Edited by Deepshikha Bhardwaj

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