Informist, Wednesday, Jun 1, 2022

By Pratiksha and Srijonee Bhattacharjee

NEW DELHI – The rupee rose against the dollar today as foreign banks sold the greenback persistently on behalf of foreign institutional investors for investment into Indian securities, dealers said.

Fall in crude oil prices also supported the rupee, as it lowers India's import bill.

The FII inflows were on account of an adjustment in global standard indices on May 12 by MSCI, which added Jindal Steel & Power, AU Small Finance Bank, Tata Elxsi and Adani Power to its MSCI India index, some dealers said.

HDFC Asset Management Co was excluded from the MSCI India index.

The rupee settled at 77.5200 a dollar, after moving in a narrow range of 12 paise during the day.

The rupee had opened higher at 77.5800 a dollar against 77.6400 on Tuesday, as crude oil prices fell on reports that the Organization of the Petroleum Exporting Countries and its allies were considering exempting Russia from oil-producing targets, dealers said.

Exempting Russia from its oil-production targets could potentially pave the way for Saudi Arabia, the United Arab Emirates and other producers in the OPEC to pump significantly more crude oil.

Prices of crude oil had surged on Monday following a report that European Union leaders had agreed in principle to cut 90% of oil imports from Russia by the end of this year, resolving a deadlock with Hungary over the bloc's toughest sanction yet on Moscow since the invasion of Ukraine three months ago.

At 1630 IST, the July contract of Brent crude oil on the Intercontinental Exchange was at $117.21 a barrel against the previous close of $115.60 a bbl. Prices had risen to $125.28 a bbl on Tuesday.

Three hours into the trading session, the rupee ascended to the day's high of 77.5075 a dollar, as some foreign banks, including a US-based bank, persistently sold the greenback for FII inflows, dealers said.

However, gains in the rupee were restricted, and it couldn't breach the immediate key resistance of 77.50 a dollar, as some state-owned banks continuously purchased the US unit on behalf of oil marketing companies, dealers said.

"The trade was dull. There was some amount of appreciation because of the inflows, but the range was narrow as there were bets on both the sides," a dealer with a state-owned bank said.

Meanwhile, the US dollar index strengthened today due to rise in Treasury yields and as concern over further acceleration in global inflation weighed on the risk appetite of investors. This also weighed on the Indian unit, dealers said. 

At 1630 IST, the dollar index, which measures the strength of the US currency against a basket of six major currencies, was at 101.97 compared with 101.75 on Tuesday.

Fall in domestic equity indices also dampened sentiment for the rupee. The Nifty 50 and the Sensex ended 0.4% and 0.3% lower, respectively.

FORWARDS

Premiums on dollar/rupee forwards were up as banks and importers bought dollars for forward delivery noting a rise in the rupee, dealers said.

Premium on the one-year, exact-period dollar/rupee contract was at 291.51 paise, against 288.62 paise on Tuesday. On an annualised basis, the premium was 3.74% against the previous close of 3.72%.

The premium payable on buying dollars for forward delivery also includes the spot dollar/rupee exchange rate.

Dealers said there wasn't much activity in the market due to absence of significant triggers, dealers said.

OUTLOOK

On Thursday, the rupee will take cues from overnight movement in the dollar index and Brent crude oil price, dealers said.

"I think the rupee will continue to move in a tight range of 77.35-77.80 in the near term," said a dealer with a private bank.

Dealers now see strong key technical support for the rupee at 77.70 a dollar and technical resistance at 77.30 a dollar.

During the day, the rupee is seen in the range of 77.30-77.70 a dollar.

India Rupee: Premiums a tad up as banks buy fwd dlrs on rupee's rise

MUMBAI – Premiums on dollar/rupee forwards rose marginally today as a rise in the rupee helped banks and importers buy dollars for forward delivery, dealers said.

The premium on the one-year, exact-period dollar/rupee contract was at 291.51 paise, as against 288.62 paise on Tuesday. On an annualised basis, the premium was 3.73% as against the previous close of 3.72%.

The premium payable on buying dollars for forward delivery also includes the spot dollar/rupee exchange rate. 

Dealers said that there wasn't much activity in the market given the absence of significant triggers, dealers said. (Srijonee Bhattacharjee)

India Rupee: Rises more as foreign banks sell dollars for FX inflows

NEW DELHI – The rupee extended gains against the dollar as some foreign banks persistently sold the greenback for foreign fund inflows, dealers said. 

Meanwhile, some state-owned banks purchased the US unit on behalf of oil marketing companies, which weighed on the local unit, according to dealers.

Dealers have now pegged immediate key technical resistance for the rupee at 77.40 a dollar.

For the rest of the day, the Indian unit is seen at 77.3000-77.7000 a dollar.  (Pratiksha)

India Rupee - Asia FX: Most units down as dollar index strengthens

NEW DELHI – Most Asian currencies fell against the greenback today as the dollar index strengthened after US Treasury yields rose and concern over further acceleration in global inflation weighed on investors' risk appetite. 

US Treasury yields rose after US Fed Governor Waller indicated he would support multiple 50-basis-point rate hikes over the next few policies.

Meanwhile, CPI inflation in the Eurozone rose to a fresh record high of 8.1% on year in May. The reading puts further pressure on the European Central Bank to quicken policy tightening and raise rates for the first time in over a decade.

At 1039 IST, the dollar index, which measures the strength of the US currency against a basket of six major currencies, was at 102.01, compared with 101.75 on Tuesday.

The South Korean won and the Taiwan dollar fell 0.6% against the dollar, the most among their Asian peers. Meanwhile, the Indonesian rupiah rose 0.2% against the dollar, tracking the broader sentiment in the equity market. (Pratiksha)

India Rupee: Rises as crude oil prices fall, domestic equities gain

NEW DELHI – The rupee rose against the greenback today as crude oil prices fell following reports that the Organization of the Petroleum Exporting Countries and its allies were considering exempting Russia from oil-producing targets, dealers said. 

Exempting Russia from its oil-production targets could potentially pave the way for Saudi Arabia, the United Arab Emirates and other producers in the OPEC to pump significantly more crude oil.

At 0928 IST, the July contract of Brent crude oil on the Intercontinental Exchange was at $116.03 a bbl against the previous close of $115.60 a bbl. Prices had risen to as much as $125.28 a bbl on Tuesday.

A rise in domestic share indices also provided support to the Indian unit, dealers said. At 0928 IST, both the Nifty 50 and the Sensex were up 0.3% each.

"I think the rupee should remain steady today as there are no significant triggers as of now," a dealer with a state-owned bank said. "The 77.70 (a dollar) level should be protected."

Dealers have now pegged immediate key technical support for the rupee at 77.70 a dollar.

For the rest of the day, the Indian unit is seen at 77.3000-77.7000 a dollar.  (Pratiksha)

India Rupee: Expected range for rupee - Jun 1

NEW DELHI – 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 Ashish Shirke

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