Informist, Monday, Nov 6, 2023

By Kabir Sharma

MUMBAI – The rupee ended higher but erased some gains against the dollar as banks persistently bought the greenback on behalf of oil marketing companies and for foreign fund outflows, dealers said. 

After opening at a near two-week high, the rupee erased gains and ended at 23.2150 a dollar, against Friday's close of 83.2850 a dollar. 

"Recent developments, including the reversal of the dollar index from levels above 107 to 105 in just three trading sessions and a drop in US 10-year yields from 4.93% to 4.50% in the last three sessions, suggest a positive outlook for the rupee," said Amit Pabari, managing director at CR Forex. 

The rupee opened on a higher note against the dollar as the dollar index tumbled in light of the weaker-than-expected US non-farm payrolls data, dealers said.

Data released on Friday by the Labor Department showed that non-farm payrolls in the US rose by 150,000 jobs in October, lower than economists' expectations of a 180,000 rise. Data for September was also revised lower to 297,000 new jobs from 336,000 reported earlier. 

Following the data, the dollar index, which measures the strength of the greenback against a basket of six major currencies, slumped to as low as 104.93 at 1537 IST. The index was at 105.06 on Friday and 106.15 on Thursday.

A drop of over 2% in crude oil prices on Friday was expected to ease the pressure on the Indian unit, but prices of the commodity recovered as top oil exporters Saudi Arabia and Russia confirmed on Sunday that they would continue with their additional voluntary output cuts until the end of the year as concerns over demand and economic growth continue to weigh on markets.

Both countries also said they would review their decisions on crude supply cuts and whether to extend, deepen or increase the cuts. 

The January contract on ICE was at $86.25 a bbl at 1602 IST. On Friday, oil prices fell about 2% to settle at $84.89 a bbl, while on Thursday, the price was at $86.65 a bbl.

A rise in domestic equity indices also supported the Indian currency. Today, the Sensex and the Nifty 50 ended 0.9% higher each. 

FORWARDS

Premiums on the one-month dollar/rupee forward contract ended sharply higher today, tracking a fall in US treasury yields, dealers said. 

The yield on the benchmark 10-year US Treasury notes fell to a five-week low on Friday, as weaker-than-expected non-farm payrolls data supported the view that the US Federal Reserve may not raise interest rates further in the current rate hike cycle.

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

The premium on the one-year, exact-period dollar/rupee forward contract was at 136.35 paise, against 134.38 on Friday. On an annualised basis, the premium was at 1.63%, against the previous close of 1.61%.

OUTLOOK

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

Market participants now await the US October Global Services PMI and Eurozone October Services PMI, both due later today. 

Dealers expect the Reserve Bank of India to continue selling dollars to prevent the rupee from runaway depreciation. They have pegged immediate technical support for the rupee at 83.30 a dollar and long-term support at 83.50 a dollar.

During the day, the rupee is seen in the range of 83.10-83.50 a dollar.

India Rupee - World FX:Dlr dn on weak US jobs data; Australian dlr up

MUMBAI – The dollar fell sharply against other major currencies, after data for US non-farm payrolls came in weaker-than-expected on Friday.

The dollar index plummeted to a six-week low today. The index, which measures the strength of the greenback against a basket of six major currencies, was at 104.88 at 1423 IST, lower than Friday's level of 105.06. It was at 106.15 on Thursday.

The Labor Department data showed that non-farm payrolls in the US rose by 150,000 jobs in October, lower than economists' expectations of a 180,000 rise. Data for September was also revised lower to 297,000 new jobs instead of 336,000 as earlier reported.

West Texas Intermediate crude price rose slightly today, erasing some of the losses it bore till Friday, when crude futures lost around 6% compared to the previous week. Crude prices were at $81.58 a barrel, up $1.07 per bbl, or 1.33%.

The pound sterling rose 0.3% against the dollar ahead of UK's GDP estimate for Jul-Sep, due later this week.

The Australian dollar was up 0.1% against the greenback as investors eyed the Reserve Bank of Australia's benchmark interest rate decision announcement on Tuesday. The Australian central bank, amid strong inflation, is expected to raise its key policy rate by 25 basis points to 4.35%, after keeping rates steady in its previous four meetings, a Reuters' poll said.

The Canadian dollar was up 0.1% against the greenback. This came despite an easing of the Canadian economy as shown by fewer-than-expected job additions in October and a rise in the joblessness rate to a 21-month high of 5.7%. The data released by Statistics Canada on Friday showed that the country added a net 17,500 jobs in October against a Reuters' prediction of a net gain of 22,500 jobs. The slump in the dollar index supported the Canadian dollar as it overshadowed the impact of the easing Canadian economy on the currency.

The euro strengthened 0.2% against the dollar, while the Japanese yen fell 0.1%.  (Sourabh Kumar and Vaishali Tyagi)

India Rupee: Erases some gains on importers' dlr demand, FX outflows

MUMBAI – The rupee erased some gains against the dollar as banks bought the greenback amid demand for the currency from oil marketing companies and other importers, and due to significant foreign fund outflows, dealers said.

The rupee began today on a higher note against the dollar as the dollar index tumbled in light of the weaker-than-expected US non-farm payrolls data, dealers said.

"The rupee opened around 83.1300-83.1400 (per dollar) level today due to weak US non-farm payrolls data, released on Friday, after which the rupee appreciated, but then there is buying in the market and some outflows are also there, but it should not go beyond 83.2500 level," a dealer at a state-owned bank said. 

Data released on Friday by the Labor Department showed that non-farm payrolls in the US rose by 150,000 jobs in October, lower than economists' expectations of a 180,000 rise. Data for September was also revised lower to 297,000 new jobs from 336,000 reported earlier. 

Following the announcement of non-farm payroll data, the dollar index, which measures the strength of the greenback against a basket of six major currencies, slumped to as low as 104.99 at 1346 IST. It landed close to its Friday's low of 104.94. The index closed at 105.06 on Friday. It was at 106.15 on Thursday.

The significant fall in US Treasury yields also contributed to the weakness in the dollar. 

Brent crude oil prices recovered slightly today, which may burden India's import bills and hence weigh on the Indian unit. The January contract on ICE was at $85.45 a bbl at 1346 IST. Oil prices fell about 2% on Friday to settle at $84.89 a bbl, and it was $86.65 a bbl on Thursday.

The recovery in crude prices today came as top oil exporters Saudi Arabia and Russia confirmed on Sunday that they would continue with their additional voluntary output cuts until the end of the year as concerns over demand and economic growth continue to weigh on the market. Further, both countries said they would review their decisions every month about crude supply cuts. 

A rise in domestic equity indices also supported the Indian currency. At 1319 IST, the Sensex and Nifty 50 were up 0.7% each. 

Market participants now await the US October Global Services PMI and Eurozone October Services PMI, both due later today.

Dealers see immediate technical support for the rupee at 83.30 a dollar. During the day,  the rupee is seen in the range of 83.00-83.30 a dollar. (Vaishali Tyagi)

India Rupee: Surges as dlr tumbles on weak US non-farm payroll data

MUMBAI – The rupee was significantly higher against the dollar today as the dollar index tumbled in light of weaker-than-expected US non-farm payrolls data, dealers said. 

"The dollar is required for all crucial payments like crude and all, so there is a demand (for dollar). This level is very lucrative for importers," a dealer at a state-owned bank said.

The Indian unit opened at 83.1300 a dollar, nearly 16 paise higher than Friday's close of 83.2850 a dollar. The Indian unit is seen at 83.00-83.30 against the dollar. 

Data released on Friday by the labor department showed that non-farm payrolls in the US rose by 150,000 jobs in October, lower than economists' expectations of a 180,000 rise. Data for September was also revised lower to 297,000 new jobs from 336,000 reported earlier. 

"The dollar is weak firstly due to FOMC (Federal Open Market Committee) and then there was weak US non-farm payrolls data, so rupee was higher," the dealer said.

The dollar index, post the announcement of non-farm payroll data, slumped to as low as 104.94 on Friday. The index, which measures the strength of the greenback against a basket of six major currencies, was at 105.05 at 0937 IST. The index closed at 105.06 on Friday. It was 106.15 on Thursday.

Following the jobs' data, yield on the 10-year US Treasury note slumped from 4.64% to 4.55% on Friday, which also contributed to the collapse of the dollar and therefore reduced pressure on the rupee. 

Brent Crude oil prices recovered slightly today, which may limit gains for the rupee. The January contract on ICE was at $85.23 a bbl at 0936 IST. Oil prices fell about 2% on Friday to settle at $84.89 a bbl, and it was $86.65 a bbl on Thursday.

Crude prices recovered slightly as top oil exporters Saudi Arabia and Russia confirmed on Sunday that they would continue with their additional voluntary oil output cuts until the end of the year as concerns over demand and economic growth continue to weigh on the market. Further, both countries said they would review their decisions about crude supply cuts and whether they would extend, deepen or increase the cuts. 

Rise in domestic equity indices also supported the Indian currency. At 0939 IST, the Sensex and Nifty 50 were up 0.6% each. 

Market participants now await the US October Global Services PMI and Eurozone October Services PMI, both due later today. 

Dealers see immediate technical support for the rupee at 83.30 a dollar.  (Vaishali Tyagi and Sourabh Kumar)

India Rupee - Asia FX: Most up as dlr slumps post weak US jobs data

MUMBAI – Most Asian currencies were up against the dollar due to a slump in the dollar index, post weaker US payrolls data from the US.

The Labor Department data on Friday showed that non-farm payrolls in the US rose by 150,000 jobs in October, lower than economists' expectations of a 180,000 rise.

Data for September was also revised lower to 297,000 new jobs instead of 336,000 as earlier reported. The two-year yields also reached the lowest on Friday, since early September.

The dollar index, post the announcement of non-farm payroll data, slumped to as low as 104.94 on Friday. The index, which measures the strength of the greenback against a basket of six major currencies, was at 105.10 at 0902 IST, which was far lower than the high of 106.22 it touched early Friday. On Friday, the dollar index closed at 105.06, while it was 106.15 on Thursday.

The South Korean won surged 2% against the US currency, despite the country's foreign exchange reserves falling for the third consecutive month in October, according to data released by the Bank of Korea on Friday.

The Indonesian rupiah was also up 1% against the greenback. Bank Indonesia and the Monetary Authority of Singapore have agreed to extend their local currency bilateral swap agreement and bilateral repo line until Nov 2024, which may lead to exchange of their local currency of up to $6.35 bln–$6.98 bln.

The Malaysian ringgit and the Thai baht strengthened 1% and 0.35 respectively against the US unit, with the Philippines peso rising 0.5% against the greenback.

The Taiwan dollar rose 0.5% against the dollar.  (Sourabh Kumar)

India Rupee: Expected range for rupee - Nov 6

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

(Vaishali Tyagi)

End

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

Edited by Avishek Dutta

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 (22) 6985-4000

Send comments to feedback@informistmedia.com

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