Informist, Monday, Apr 11, 2022

By Pratiksha and Srijonee Bhattacharjee 

MUMBAI/NEW DELHI – The rupee fell against the US dollar today because oil marketing companies purchased the greenback persistently, dealers said.   

The rupee opened at 75.9150 a dollar, nearly unchanged from Friday's close of 75.8950 a dollar, but rose to 75.7900 a dollar on the back of sales of the greenback by foreign banks for foreign fund inflows related to a large Indian corporate, dealers said. 

According to dealers, some state-owned banks stepped in to sell the US unit on behalf of exporters, which also lent support to the Indian currency. 

The rupee moved in a narrow range of 75.80-75.85 a dollar for an hour, after which it was dragged down to 75.95 a dollar as some state-owned banks purchased the greenback for oil marketing companies, dealers said. 

Oil prices dropped by more than $2 a barrel today after a second straight weekly decline on plans to release record volumes of crude and oil products from strategic reserves, as well as due to continuing coronavirus lockdowns in China.

Member nations of the International Energy Agency will release 60 mln barrels over the next six months, with the US matching that amount as part of its 180-mln-bbl release announced in March.

Moreover, market participants have been watching developments in China, where authorities have kept Shanghai, a city of 26 mln people, locked down under its "zero tolerance" for COVID-19. China is the world's biggest oil importer.

At 1657 IST, the June contract of Brent crude on the Intercontinental Exchange was at $99.37 a bbl as against the previous close of $102.78 per bbl. Prices fell to $99.15 a bbl earlier today. 

The rupee then moved in a range of 75.90-75.95 for a duration of almost two hours, after which it breached the 76-a-dollar mark on the back of dollar purchases by oil importers. 

"Buying (of dollars) for oil importers started at around the 75.81-75.82 (a dollar) level and continued throughout the day," said a dealer with a state-owned bank. "There was aggressive buying (of dollars) in the last few hours."

The rupee had last touched the 76-a-dollar level on Mar 29. 

Weakness in domestic equity indices also weighed on sentiment for the rupee, according to dealers. The Nifty 50 and the Sensex ended down 0.6% and 0.8%, respectively.

Meanwhile, the dollar remained firm against other major currencies ahead of the release of US inflation data for March on Tuesday. This also weighed on the local unit, according to dealers. 

The dollar index, which measures the greenback's value against six major currencies, climbed to 100.04 earlier today. It had topped 100 for the first time in nearly two years on Friday.

At 1657 IST, the dollar index was at 99.83 at 1455 IST as against 99.84 on Friday.

The rupee closed at 75.95 a dollar on the back of exporters' sales of the greenback, dealers said. 

FORWARDS

Premiums on dollar/rupee forward contracts fell because some state-owned banks executed buy-sell swaps (bought the greenback against the rupee in immediate tenure and sold it for delivery in longer tenure).  

Dealers said a big state-owned bank executed these swaps in order to generate dollars for its offshore units against surplus rupees lying with it.

"Premiums have come up a bit after the Reserve Bank of India policy, which is why it is lucrative to make a buy-sell swap and generate dollars for depo (deposits to offshore units) purposes and receive the high premium now," a dealer with a state-owned bank said.    

Thew premium on the one-year, exact-period, contract was at 299.98 paise as against 300.68 paise Friday and an intraday high of 305.69 paise. On an annualised basis, the premium was at 3.95% as against 3.96% at the previous close. 

OUTLOOK

On Tuesday, the Indian unit is seen tracking overnight movement in the dollar index and Brent crude oil prices in the backdrop of the ongoing war between Russia and Ukraine, dealers said.

Dealers have pegged key technical support for the rupee at 76.20 a dollar. 

"There was high probability for the rupee to cross the 76 (a dollar) level today, which happened too," said a dealer with a state-owned bank. "Since the key support level has breached, the rupee might see some more downward movement in the coming days."

During the day, the rupee is seen at 75.7000-76.2000 a dollar.

India Rupee: Falls below 76/$1 mark as PSU banks buy dlrs for oil cos

NEW DELHI – The rupee fell further against the dollar and breached the 76-a-dollar mark, as some state-owned banks persistently purchased the greenback for oil marketing companies in significant quantum, dealers said.

"There is strong buying for oil since morning," said a dealer with a state-owned bank. "They must have bought at least a yard (a billion dollars). The 76-a-dollar mark was also crossed due to their buying."

Crude oil prices continued to fall as member nations of the International Energy Agency plan to release record volumes of crude and oil products from strategic reserves and on continuing coronavirus lockdowns in China.

Member nations of the International Energy Agency will release 60 mln barrels over the next six months, with the US matching that amount as part of its 180 mln bbl release announced in March.

At 1500 IST, the June contract of Brent crude on the Intercontinental Exchange was at $100.18 a bbl against the previous close of $102.78 per bbl. Prices fell to $99.79 a bbl earlier today.

For the rest of the day, the rupee is seen at 75.7000-76.2000 a dollar.  (Pratiksha and Srijonee Bhattacharjee)

India Rupee - Asia FX: Most units down as dlr firm ahead of US CPI Tue

MUMBAI – Most Asian currencies were down as the dollar remained firm ahead of the release of US inflation data for March on Tuesday.

The dollar index, which measures the greenback's value against six major currencies, climbed to 100.03 earlier today. It topped 100 for the first time in nearly two years on Friday. This rise came ahead of the release of US March inflation data, scheduled for Tuesday.

Market participants have priced in the risk of ever-larger rate hikes from the US Federal Reserve, with expectation of a 50-basis-point hike at both the May and June meetings, thereby, underlining the importance of the US consumer price report.

Asian units were also weighed down as investors reacted to China's inflation data for March.

China's consumer price index rose 1.5% on year in March and producer price index jumped 8.3%, surging above expectations of 1.2% and 7.9%, respectively, which weighed on the sentiment.

Among Asian currencies, the Philippine peso and the South Korean won fell 0.9% and 0.8%, respectively.  (Richard Fargose)

India Rupee: Rises as bks sell dlr for exporters; firm US unit weighs

NEW DELHI – The rupee rose against the dollar today after some banks stepped in to sell the greenback on behalf of exporters at relatively higher dollar/rupee levels, dealers said.

However, gains in the local unit were capped as the US currency stayed elevated against other major currencies ahead of the release of US March inflation data on Tuesday, dealers said.

Cleveland Fed president Loretta Mester said on Sunday, "Inflation will remain high this year and the next even as the Fed moves steadily to lower the pace of price increases," according to reports. 

At 1044 IST, the dollar index, which measures the greenback's value against six major currencies, was at 99.91, against 99.84 on Friday. It was at 99.75 on Thursday.

Meanwhile, domestic and Asian share indices fell today, tracking losses in the US stock futures. This further weighed on sentiment for the Indian unit, dealers said.

At 1045 IST, the Nifty 50 and Sensex were down 0.5% and 0.7%, respectively.

Dealers have now pegged key technical support for the rupee at 76.00 a dollar. 

The rupee is seen at 75.7000-76.2000 a dollar for the rest of the day.  (Pratiksha)

India Rupee: Expected range for rupee - Apr 11

Informist, Monday, Apr 11, 2022

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 and Richard Fargose)                                         

End

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

Edited by Avishek Dutta

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