Informist, Friday, Jan 27, 2023

By Aiswarya Santhosh

MUMBAI – The rupee ended higher against the dollar today, despite a slump in domestic share indices, due to sales of the greenback by foreign banks on behalf of foreign portfolio investors, dealers said.

After moving in a narrow range of 18 paise throughout the day, the rupee closed at 81.5225 a dollar against 81.5900 a dollar on Wednesday. Domestic financial markets were closed on Thursday on account of Republic Day. 

The Indian unit opened 11 paise higher against the dollar at 81.4800 today tracking gains in Asian equities. Most Asian equity indices opened higher today as investors were buoyed by the favourable GDP data in the US, dealers said. The GDP in the US grew faster-than expected by 2.9% on year in Oct-Dec, which showed signs of resilience in the world's largest economy.

Shortly after opening, the rupee fell to the day's low of 81.6675 a dollar as foreign banks bought the greenback for importers and oil marketing companies noting the relatively lower dollar/rupee levels, dealers said. 

However, eventually it recovered as foreign banks sold the greenback for foreign portfolio inflows, dealers said. 

Some dealers said the foreign portfolio inflows were likely on account of Adani Enterprise Ltd's 200-bln rupee follow-on public offering, which opened today and will close on Tuesday. Few remained doubtful of the same as a report released by Hindenburg Research on Wednesday sent Adani Enterprises shares below the FPO price, thus raising a concern whether the FPO will get fully subscribed or not. 

"The Adani FPO allotment is subscribed very less, as per reports, so of course the FPO inflows have been impacted," a dealer with a brokerage firm said. "The sentiment has taken a hit because of the Adani saga, and there is a structural reallocation happening because of that," 

Dealers also said that the Indian unit was supported by dollar sales by some banks ahead of daily reference rate fixing, dealers said. 

Domestic share markets fell by about 2% during the day on account of concerns relating to companies of the Adani Group, which further drowned other shares. This subsequently dampened sentiment for the Indian currency, dealers said. The Nifty 50 and the Sensex ended 1.6% and 1.5% lower, respectively.

Dealers said volumes in the currency market remained lower than usual today as traders avoided placing large bets due to lack of significant cues. 

"The rupee was traded in a narrow range today, though there was heavy fixing based selling (dollars). Multiple variations of range occurred, but the currency remained in the same tight range of around 10 paise," said a dealer with a private bank. "Inflows were also there in the market."

A rebound in Chinese demand and the better-than-expected US GDP data lifted prices of crude oil, which weighed on the rupee as well, dealers said. 

At 1658 IST, the March contract of Brent crude oil on the Intercontinental Exchange was at $88.81 a barrel as against $87.72 a bbl on Thursday. The contract settled at $86.12 a bbl on Wednesday.

FORWARDS

Premiums on dollar/rupee one-year forward contracts fell tracking a rise in US Treasury yields, dealers said.

The 10-year US Treasury yields rose after recent data showed resilience in the US economy, which may prompt the Fed to maintain its monetary policy stance in order to cool inflation going forward.

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

Dealers said traders avoided heavy bets ahead of the US policy meeting outcome next week. 

"I think this range of 2.00-2.40% will persist till the FOMC decision," a dealer with a brokerage firm said. "Any fresh cues from the decision will decide the further trajectory of premiums."

The premium on the one-year dollar/rupee contract was 188.00 paise, against 191.78 paise on Wednesday. On an annualised basis, the premium was at 2.31%, against the previous close of 2.35%.

OUTLOOK

On Monday, the rupee will take cues from overnight movement in the dollar index and crude oil prices. 

"Due to bank strikes on 30 and 31 Jan, we may be seeing some selling in dollar/rupee," said Anil Kumar Bhansali, head of treasury, Finrex Treasury Advisors LLP. "The range for Monday could be between 81.20 to 82.00."

The United Forum of Bank Unions has called for a nationwide strike on Jan 30-31 in support of various demands of its members, a release from State Bank of India said on Tuesday. 

The next technical support for the rupee is pegged at 81.80 a dollar, while long-term resistance is pegged at 80.80 a dollar. The rupee might move in the range of 81.30-81.80 a dollar during the day, dealers said.

India Rupee - World FX: Yen up as Tokyo CPI at over 40-year high

MUMBAI – The Japanese yen was up against the dollar as the consumer price index for the capital city of Tokyo came in higher than expected. 

Core consumer prices in Japan's capital, a leading indicator of nationwide trends, rose 4.3% on year in January against median market forecast for a 4.2% rise, marking the fastest annual gain in nearly 42 years and keeping the central bank under pressure. 

The yen rose 0.4% against the dollar after the data was released. 

The dollar index was down after rising on Thursday on the back of better than expected US GDP data. US GDP increased 2.9% on year in the Oct-Dec quarter. Economists polled by Reuters had forecast GDP growth of 2.6% rate.

At 1615 IST, the dollar index, which measures the strength of the greenback against a basket of six major currencies, was at 101.82 against 101.84 on Thursday, and 101.64 on Wednesday.

The pound sterling was down 0.4% against the dollar after UK Chancellor Jeremy Hunt said, "Understand the importance of low taxes. The best tax cut right now is a cut in inflation," suggesting that there will be no tax cuts anytime soon. (Kabir Sharma)

India Rupee: In narrow range; dlr buys by importers weigh on rupee

MUMBAI – The rupee remained in a narrow range against the dollar as sales of the greenback by banks on behalf of foreign portfolio investors offset the impact of dollar purchases by banks for importers, dealers said.

The dollar/rupee has moved in a range of 18 paise so far today.

"Some foreign banks were buying (dollars) for importers in early trade because of good (dollar/rupee) levels," a dealer with a big state-owned bank said. 

Meanwhile, some foreign banks sold the US unit on behalf of foreign portfolio investors, which provided support to the Indian unit, dealers said.

The Indian unit was also supported by dollar sales by some banks ahead of the daily reference rate fixing, dealers said. 

A slump in domestic equity indices also exerted pressure on the Indian currency, dealers said. At 1402 IST, the Nifty 50 and the Sensex were both down 1.9%.

The dollar index rose after US GDP data for the fourth quarter came in better than expected, leading to expectations of the US Federal Reserve maintaining its hawkish stance for longer. This also weighed on the rupee, dealers said.

US GDP increased 2.9% on year in the Oct-Dec quarter. Economists polled by Reuters had forecast GDP growth of 2.6% rate.

At 1400 IST, the dollar index, which measures the strength of the greenback against a basket of six major currencies, was at 101.92 against 101.84 on Thursday, and 101.64 on Wednesday.

Dealers said volumes in the currency market remain lower than usual today as traders avoided placing large bets due to lack of significant cues. 

Dealers have pegged technical support for the rupee at 81.80 a dollar. 

The rupee is expected to move in a range of 81.40-81.80 for the rest of the day, dealers said. (Kabir Sharma)

India Rupee - Asia FX: Most up as Asia shares rise post US econ data

NEW DELHI – Most Asian currencies were up against the dollar as Asian equity indices gained, tracking the overnight rise in Wall Street after data showed that the US economy grew more than expected. The KOSPI and Philippine SE indices were up 1% and 0.2%, respectively. 

US GDP grew faster than expected by 2.9% in Oct-Dec, indicating that the world's largest economy remained resilient and leading to hopes of a soft landing for the US economy, as expected by the US Federal Reserve. At 1107 IST, the dollar index, which measures the strength of the greenback against a basket of six major currencies, was at 101.97 as against 101.84 on Thursday, and 101.64 on Wednesday.

The Philippine peso was 0.1% higher against the greenback as optimism persisted after data on Thursday showed that the Philippine economy grew 7.2% in Oct-Dec. The Malaysian ringgit and South Korean won were 0.3% and 0.1% higher, respectively, against the greenback.

Bucking the trend, the Indonesian rupiah and Thai baht were both 0.2% down against the US unit.

The market in China was closed today for observance of Spring Festival. (Ananya Chaudhuri)

India Rupee: Erases most gains as banks buy dollars for importers

MUMBAI – The rupee erased most of its opening gains against the dollar as banks stepped in to buy the greenback on behalf of importers, dealers said. 

Importers bought the greenback to take advantage of the relatively lower dollar/rupee levels, dealers added.

The rupee opened higher at 81.4800 a dollar tracking gains in Asian equities. Most Asian indices opened higher today as investors were buoyed by the favourable GDP data in the US, dealers said. The GDP in the US grew faster-than expected by 2.9% on year in Oct-Dec, which showed signs of resilience in the world's largest economy.

A rebound in Chinese demand and the better-than-expected US GDP data lifted prices of crude oil, which weighed on the rupee as well, dealers said. 

At 0950 IST, the March contract of Brent crude oil on the Intercontinental Exchange was at $87.84 a barrel as against $87.72 a bbl on Thursday. The contract settled at $86.12 a bbl on Wednesday.

Dealers said the rupee also found support from foreign portfolio inflows, likely on account of  Adani Enterprise Ltd's 200-bln rupee follow-on public offering, which opened today and will close on Tuesday.

Dealers have pegged technical support for the rupee at 81.80 a dollar. 

The rupee is expected to move in a range of 81.40-81.80 for the rest of the day, dealers said. (Kabir Sharma and Pratiksha)

India Rupee: Expected range for rupee - Jan 27

NEW DELHI – 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)

End

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

Edited by Tanima Banerjee

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.

Informist, Friday, Jan 27, 2023

By Aiswarya Santhosh

MUMBAI – The rupee ended higher against the dollar today, despite a slump in domestic share indices, due to sales of the greenback by foreign banks on behalf of foreign portfolio investors, dealers said.

After moving in a narrow range of 18 paise throughout the day, the rupee closed at 81.5225 a dollar against 81.5900 a dollar on Wednesday. Domestic financial markets were closed on Thursday on account of Republic Day. 

The Indian unit opened 11 paise higher against the dollar at 81.4800 today tracking gains in Asian equities. Most Asian equity indices opened higher today as investors were buoyed by the favourable GDP data in the US, dealers said. The GDP in the US grew faster-than expected by 2.9% on year in Oct-Dec, which showed signs of resilience in the world's largest economy.

Shortly after opening, the rupee fell to the day's low of 81.6675 a dollar as foreign banks bought the greenback for importers and oil marketing companies noting the relatively lower dollar/rupee levels, dealers said. 

However, eventually it recovered as foreign banks sold the greenback for foreign portfolio inflows, dealers said. 

Some dealers said the foreign portfolio inflows were likely on account of Adani Enterprise Ltd's 200-bln rupee follow-on public offering, which opened today and will close on Tuesday. Few remained doubtful of the same as a report released by Hindenburg Research on Wednesday sent Adani Enterprises shares below the FPO price, thus raising a concern whether the FPO will get fully subscribed or not. 

"The Adani FPO allotment is subscribed very less, as per reports, so of course the FPO inflows have been impacted," a dealer with a brokerage firm said. "The sentiment has taken a hit because of the Adani saga, and there is a structural reallocation happening because of that," 

Dealers also said that the Indian unit was supported by dollar sales by some banks ahead of daily reference rate fixing, dealers said. 

Domestic share markets fell by about 2% during the day on account of concerns relating to companies of the Adani Group, which further drowned other shares. This subsequently dampened sentiment for the Indian currency, dealers said. The Nifty 50 and the Sensex ended 1.6% and 1.5% lower, respectively.

Dealers said volumes in the currency market remained lower than usual today as traders avoided placing large bets due to lack of significant cues. 

"The rupee was traded in a narrow range today, though there was heavy fixing based selling (dollars). Multiple variations of range occurred, but the currency remained in the same tight range of around 10 paise," said a dealer with a private bank. "Inflows were also there in the market."

A rebound in Chinese demand and the better-than-expected US GDP data lifted prices of crude oil, which weighed on the rupee as well, dealers said. 

At 1658 IST, the March contract of Brent crude oil on the Intercontinental Exchange was at $88.81 a barrel as against $87.72 a bbl on Thursday. The contract settled at $86.12 a bbl on Wednesday.

FORWARDS

Premiums on dollar/rupee one-year forward contracts fell tracking a rise in US Treasury yields, dealers said.

The 10-year US Treasury yields rose after recent data showed resilience in the US economy, which may prompt the Fed to maintain its monetary policy stance in order to cool inflation going forward.

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

Dealers said traders avoided heavy bets ahead of the US policy meeting outcome next week. 

"I think this range of 2.00-2.40% will persist till the FOMC decision," a dealer with a brokerage firm said. "Any fresh cues from the decision will decide the further trajectory of premiums."

The premium on the one-year dollar/rupee contract was 188.00 paise, against 191.78 paise on Wednesday. On an annualised basis, the premium was at 2.31%, against the previous close of 2.35%.

OUTLOOK

On Monday, the rupee will take cues from overnight movement in the dollar index and crude oil prices. 

"Due to bank strikes on 30 and 31 Jan, we may be seeing some selling in dollar/rupee," said Anil Kumar Bhansali, head of treasury, Finrex Treasury Advisors LLP. "The range for Monday could be between 81.20 to 82.00."

The United Forum of Bank Unions has called for a nationwide strike on Jan 30-31 in support of various demands of its members, a release from State Bank of India said on Tuesday. 

The next technical support for the rupee is pegged at 81.80 a dollar, while long-term resistance is pegged at 80.80 a dollar. The rupee might move in the range of 81.30-81.80 a dollar during the day, dealers said.

India Rupee - World FX: Yen up as Tokyo CPI at over 40-year high

MUMBAI – The Japanese yen was up against the dollar as the consumer price index for the capital city of Tokyo came in higher than expected. 

Core consumer prices in Japan's capital, a leading indicator of nationwide trends, rose 4.3% on year in January against median market forecast for a 4.2% rise, marking the fastest annual gain in nearly 42 years and keeping the central bank under pressure. 

The yen rose 0.4% against the dollar after the data was released. 

The dollar index was down after rising on Thursday on the back of better than expected US GDP data. US GDP increased 2.9% on year in the Oct-Dec quarter. Economists polled by Reuters had forecast GDP growth of 2.6% rate.

At 1615 IST, the dollar index, which measures the strength of the greenback against a basket of six major currencies, was at 101.82 against 101.84 on Thursday, and 101.64 on Wednesday.

The pound sterling was down 0.4% against the dollar after UK Chancellor Jeremy Hunt said, "Understand the importance of low taxes. The best tax cut right now is a cut in inflation," suggesting that there will be no tax cuts anytime soon. (Kabir Sharma)

India Rupee: In narrow range; dlr buys by importers weigh on rupee

MUMBAI – The rupee remained in a narrow range against the dollar as sales of the greenback by banks on behalf of foreign portfolio investors offset the impact of dollar purchases by banks for importers, dealers said.

The dollar/rupee has moved in a range of 18 paise so far today.

"Some foreign banks were buying (dollars) for importers in early trade because of good (dollar/rupee) levels," a dealer with a big state-owned bank said. 

Meanwhile, some foreign banks sold the US unit on behalf of foreign portfolio investors, which provided support to the Indian unit, dealers said.

The Indian unit was also supported by dollar sales by some banks ahead of the daily reference rate fixing, dealers said. 

A slump in domestic equity indices also exerted pressure on the Indian currency, dealers said. At 1402 IST, the Nifty 50 and the Sensex were both down 1.9%.

The dollar index rose after US GDP data for the fourth quarter came in better than expected, leading to expectations of the US Federal Reserve maintaining its hawkish stance for longer. This also weighed on the rupee, dealers said.

US GDP increased 2.9% on year in the Oct-Dec quarter. Economists polled by Reuters had forecast GDP growth of 2.6% rate.

At 1400 IST, the dollar index, which measures the strength of the greenback against a basket of six major currencies, was at 101.92 against 101.84 on Thursday, and 101.64 on Wednesday.

Dealers said volumes in the currency market remain lower than usual today as traders avoided placing large bets due to lack of significant cues. 

Dealers have pegged technical support for the rupee at 81.80 a dollar. 

The rupee is expected to move in a range of 81.40-81.80 for the rest of the day, dealers said. (Kabir Sharma)

India Rupee - Asia FX: Most up as Asia shares rise post US econ data

NEW DELHI – Most Asian currencies were up against the dollar as Asian equity indices gained, tracking the overnight rise in Wall Street after data showed that the US economy grew more than expected. The KOSPI and Philippine SE indices were up 1% and 0.2%, respectively. 

US GDP grew faster than expected by 2.9% in Oct-Dec, indicating that the world's largest economy remained resilient and leading to hopes of a soft landing for the US economy, as expected by the US Federal Reserve. At 1107 IST, the dollar index, which measures the strength of the greenback against a basket of six major currencies, was at 101.97 as against 101.84 on Thursday, and 101.64 on Wednesday.

The Philippine peso was 0.1% higher against the greenback as optimism persisted after data on Thursday showed that the Philippine economy grew 7.2% in Oct-Dec. The Malaysian ringgit and South Korean won were 0.3% and 0.1% higher, respectively, against the greenback.

Bucking the trend, the Indonesian rupiah and Thai baht were both 0.2% down against the US unit.

The market in China was closed today for observance of Spring Festival. (Ananya Chaudhuri)

India Rupee: Erases most gains as banks buy dollars for importers

MUMBAI – The rupee erased most of its opening gains against the dollar as banks stepped in to buy the greenback on behalf of importers, dealers said. 

Importers bought the greenback to take advantage of the relatively lower dollar/rupee levels, dealers added.

The rupee opened higher at 81.4800 a dollar tracking gains in Asian equities. Most Asian indices opened higher today as investors were buoyed by the favourable GDP data in the US, dealers said. The GDP in the US grew faster-than expected by 2.9% on year in Oct-Dec, which showed signs of resilience in the world's largest economy.

A rebound in Chinese demand and the better-than-expected US GDP data lifted prices of crude oil, which weighed on the rupee as well, dealers said. 

At 0950 IST, the March contract of Brent crude oil on the Intercontinental Exchange was at $87.84 a barrel as against $87.72 a bbl on Thursday. The contract settled at $86.12 a bbl on Wednesday.

Dealers said the rupee also found support from foreign portfolio inflows, likely on account of  Adani Enterprise Ltd's 200-bln rupee follow-on public offering, which opened today and will close on Tuesday.

Dealers have pegged technical support for the rupee at 81.80 a dollar. 

The rupee is expected to move in a range of 81.40-81.80 for the rest of the day, dealers said. (Kabir Sharma and Pratiksha)

India Rupee: Expected range for rupee - Jan 27

NEW DELHI – 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)

End

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

Edited by Tanima Banerjee

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.