Image used for representative purpose only.
| Photo Credit: REUTERS

The rupee appreciated 3 paise to settle at 83.43 (provisional) against the U.S. dollar on Friday, tracking a weak American currency and retreating crude oil prices.

Forex traders said a massive selling in the domestic equity market and outflow of foreign funds capped the gains in the local currency.

At the interbank foreign exchange, the domestic unit opened at 83.40 and moved in the range of 83.34 and 83.44 against the greenback during the session.

The local unit finally settled at 83.43 (provisional) against the dollar, registering a rise of 3 paise from its previous close.

The rupee had settled 3 paise lower at 83.46 against the dollar on Thursday.

Anuj Choudhary, Research Analyst, Sharekhan by BNP Paribas, said the rupee gained on a weak U.S. dollar and a decline in crude oil prices. However, weak domestic markets and FII outflows capped sharp gains.

The weak dollar was attributed to the U.S. Federal Reserve’s decision to keep the key interest rate unchanged for the sixth consecutive time, citing slower progress on the inflation front.

Mr. Choudhary further said the rupee is expected to trade with a slight negative bias on weak domestic markets and selling pressure from foreign investors. However, a weak tone and a soft U.S. dollar may support the rupee at lower levels.

“Traders may remain cautious ahead of non-farm payrolls report and ISM services PMI data from the U.S. today. Encouraging non-farm payrolls may support the dollar while dismal data may weigh on the greenback. USD-INR spot price is expected to trade in a range of ₹83.20 to ₹83.60,” he added.

India’s manufacturing PMI fell to 58.8 in April 2024 from 59.1 in the previous month, a monthly survey said on Thursday.

The seasonally adjusted HSBC India Manufacturing Purchasing Managers’ Index (PMI), however, recorded the second fastest improvement in operating conditions in three-and-a-half years supported by buoyant demand.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, declined 0.10% to 105.07.

Brent crude futures, the global oil benchmark, slipped 0.04% to $83.64 per barrel.

On the domestic equity market front, Sensex tumbled 732.96 points, or 0.98%, to settle at 73,878.15, and Nifty tanked 172.35 points, or 0.76%, to close at 22,475.85.

Foreign institutional investors (FIIs) were net sellers in the capital markets on Thursday, as they sold shares worth ₹964.47 crore on a net basis, according to exchange data.

How the Indian Rupee fared in the last six days.
| Photo Credit: PTI

The rupee stayed range-bound and settled 2 paise higher at 83.26 against the U.S. dollar on Thursday as the American currency retreated from its elevated levels after the U.S. Federal Reserve was a bit dovish in its policy meeting.

Forex traders said the local unit got support from positive domestic equity markets and risk-on sentiments.

The U.S. Federal Reserve kept interest rates on hold and its Chairman Jerome Powell looked content with the economy’s soft landing. Following the decision, the dollar index softened, and the 10-year bond yield fell to 4.70.

At the interbank foreign exchange, the rupee opened at 83.23 and finally settled at 83.26 against the greenback, registering a gain of 2 paise from its previous close.

During the day, the rupee witnessed range-bound trade reaching the peak of 83.19 and hitting the lowest level of 83.27 against the American currency.

On Wednesday, the rupee settled at 83.28 against the U.S. dollar and had hit an all-time low level of 83.35 against the American currency during intra-day.

“After Fed dovishness, U.S. dollar was still well bid against the rupee as ECB (External Commercial Borrowing) payments continued along with oil bids and FPI outflows. Dollar index fell to 106.20 while Asian currencies also gained.”

“The U.S. 10-year bond yield was also down since morning after falling about 20 bps yesterday. Meanwhile, Indian equities surged ahead by 0.8% on risk on sentiments,” Anil Kumar Bhansali Head of Treasury and Executive Director Finrex Treasury Advisors LLP.

Further, Mr. Bhansali said that rupee is expected to remain in a range of 83 to 83.35.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading lower by 0.65% at 106.18.

Brent crude futures, the global oil benchmark, rose 1.43% to $85.84 per barrel.

On the domestic equity market front, the BSE Sensex closed 489.57 points or 0.77% higher at 64,080.90 points. The broader NSE Nifty advanced 144.10 points or 0.76% to 19,133.25 points.

Foreign Portfolio Investors (FPIs) were net sellers in the capital markets on Wednesday as they sold shares worth ₹1,816.91 crore, according to exchange data.

The rupee depreciated 9 paise to close at an all-time low of 83.33 (provisional) against the U.S. dollar on Wednesday, tracking a strong greenback against major rivals overseas and unabated foreign capital outflows.

Besides, a negative trend in domestic equities and elevated crude oil prices amid geopolitical uncertainty in the Middle East weighed on investor sentiments, according to forex traders.

At the interbank foreign exchange, the rupee opened at 83.26 against the dollar. During the trading session, it touched an intra-day low of 83.35 and a high of 83.26 against the American currency.

The local unit finally settled at its lifetime low of 83.33 (provisional), lower by 9 paise against its previous close.

On Tuesday, the rupee settled at 83.24 against the American currency.

“We expect the rupee to trade with a slight negative bias on the strong Dollar amid geopolitical uncertainty in the Middle East. Weak tone in domestic markets may also weigh on the rupee.”

“Traders may take cues from manufacturing PMI from India and ADP non-farm employment, JOLTS job opening and ISM manufacturing PMI data from the US. Investors may remain cautious ahead of the FOMC meeting tonight. USD/INR spot price is expected to trade in a range of ₹83-83.60,” said Anuj Choudhary – Research Analyst at Sharekhan by BNP Paribas.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.20% higher at 106.87.

Global oil benchmark Brent crude futures advanced 1.34% to $86.16 per barrel.

On the domestic equity market front, BSE Sensex was trading 283.60 points or 0.44% lower at 63,591.33, while the broader NSE Nifty declined 90.45 points or 0.47% to 18,989.15.

Forex traders said disappointing macroeconomic data from India and FII outflows further pressurised the rupee.

On the domestic macroeconomic data, the seasonally adjusted S&P Global India Manufacturing Purchasing Managers’ Index (PMI) slipped from 57.5 in September to 55.5 in October, the slowest rate of expansion since February.

Foreign institutional investors were net sellers in the capital market on Tuesday as they offloaded shares worth ₹696.02 crore, according to exchange data.

The rupee traded in a narrow range to settle 5 paise higher at 83.23 (provisional) against the U.S. dollar on Thursday, tracking softening crude prices in the international markets amid lingering geopolitical uncertainties. However, foreign fund outflows, a weak greenback overseas and a negative trend in domestic equities weighed on investor sentiments, forex traders said.

At the interbank foreign exchange market, the local unit opened at 83.26 against the U.S. currency and witnessed a high of 83.23 and a low of 83.28 during intra-day trade.

The local unit settled at 83.23 (provisional), registering a gain of 5 paise over its previous close.

The rupee declined on Thursday pressurised by a weak tone in the domestic markets and a rise in U.S. Dollar. FII selling also weighed on the domestic currency, said Anuj Choudhary – Research Analyst at Sharekhan by BNP Paribas.

The dollar index, which gauges the greenback’s strength against a basket of six currencies, rose 0.05% to 106.61.

Global oil benchmark Brent crude futures fell 1.92% to $89.74 per barrel.

“We expect the rupee to trade with a slight negative bias as risk aversion in the global markets amid rising geopolitical uncertainty in the Middle East may put pressure on Rupee,” Mr. Choudhary said.

However, any diplomatic efforts to contain the conflict in the Middle East may support the rupee at lower levels. Traders may take cues from weekly unemployment claims and existing home sales data from the U.S.

“Investors may remain cautious ahead of U.S. Federal Reserve Chair, Jerome Powell’s speech for some cues over monetary policy trajectory. USD/INR spot price is expected to trade in a range of ₹83 to ₹83.60,” he said.

On the domestic equity market front, Sensex fell 247.78 points or 0.38% to settle at 65,629.24 points. The Nifty declined 46.40 points or 0.24% to 19,624.70 points.

Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Wednesday as they sold shares worth ₹1,831.84 crore, according to exchange data.

The rupee settled 2 paise lower at 83.27 (provisional) against the U.S. dollar on Wednesday, tracking negative cues from domestic equity markets amid surging crude oil prices overseas.

However, fresh foreign capital inflows and a weak greenback against major rivals overseas favoured the rupee and restricted the loss, forex traders said.

At the interbank foreign exchange, the domestic unit opened at 83.24 against the dollar and traded in a narrow range of 83.23 to 83.27. It finally settled at 83.27 (provisional) against the greenback, registering a loss of 2 paise over its previous close.

On Tuesday, the rupee settled at 83.25 against the U.S. dollar.

Anuj Choudhary, Research Analyst at Sharekhan by BNP Paribas, said the rupee declined amid weak domestic markets and a jump in crude oil prices.

“However, the softening of the U.S. dollar cushioned the downside. The U.S. dollar softened as U.S. President Joe Biden landed in Israel raising expectations that the Hamas-Israel conflict may get contained.

“This waned safe-haven demand for the U.S. dollar. Dovish comments from U.S. Federal Reserve officials also weighed on the greenback. Economic data from the U.S. on Tuesday topped forecasts as retail sales and industrial production were better than market expectations,” he said.

Mr. Choudhary also said that traders may take cues from housing market data and the U.S. Beige Book, a report based on the analysis of Federal Reserve officials.

“USD-INR spot price is expected to trade in a range of ₹82.90 to ₹83.60.”

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.05% to 106.20.

Brent crude futures, the global oil benchmark, witnessed a sharp rise of 3.05% to $89.30 per barrel.

On the domestic equity market front, the BSE Sensex closed 551.07 points or 0.83% lower at 65,877.02. The broader NSE Nifty declined 140.40 points or 0.71% to 19,671.10.

Foreign Institutional Investors (FIIs) were net buyers in the capital markets on Tuesday as they purchased shares worth ₹263.68 crore, according to exchange data.

File picture of a bank customer depositing ₹2,000 currency note
| Photo Credit: R. Ragu

The Reserve Bank of India (RBI) has extended the deadline for exchange and deposit of ₹2,000 bank notes until October 7, adding that the denomination will continue to be legal tender even after the date. From October 8, individuals and entities can exchange ₹2,000 notes at RBI issue offices.

The earlier deadline to deposit and exchange the note was today, September 30.

An RBI notification said that deposit or exchange of ₹2,000 notes at bank branches would be stopped from October 8, but can be exchanged at the 19 RBI Issue Offices up to a limit of ₹20,000 at a time.

Individuals and entities within the country can also send ₹2,000 banknotes through India Post, addressed to any of the 19 RBI Issue Offices for credit to their bank accounts in India. Such exchange or credit, said the central bank, shall be subject to relevant RBI and Government regulations, submission of valid identity documents and due diligence as deemed fit by RBI.

However, courts, law enforcement agencies, government departments and other public authority involved in investigation proceedings or enforcement, may deposit and exchange the ₹2,000 notes at any of the RBI Issue Offices without any limit.

According to the data received from banks, of the total value of ₹3.56 lakh crore of ₹2,000 banknotes in circulation as on May 19, 2023, ₹3.42 lakh crore has been received back, leaving only ₹0.14 lakh crore in circulation as at the close of business on September 29, 2023.

Thus, 96% of the ₹2,000 banknotes in circulation as on May 19, 2023 has since been returned.

The rupee pared initial gains to settle 2 paise lower at 83.03 (provisional) against the U.S. dollar on Thursday, weighed down by a surge in crude oil prices and strong American currency overseas.

However, a positive trend in domestic markets cushioned the downside for the local unit, forex traders said.

At the interbank foreign exchange market, the local unit opened at 82.98 against the U.S. dollar and moved in a range of 82.93 and 83.04.

The rupee finally settled at 83.03 (provisional) against the U.S. dollar, down 2 paise from its previous close.

On Wednesday, the rupee closed at 83.01 against the U.S. currency.

“The Indian rupee fell on Thursday on a positive U.S. Dollar and rising crude oil prices. This may impact the external payments.

“However, the positive tone of domestic equities prevented a sharp fall in the domestic currency. The U.S. Dollar gained on hotter than expected CPI raised rate hike concerns,” said Anuj Choudhary – Research Analyst at Sharekhan by BNP Paribas.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, rose marginally by 0.01% to 104.77.

Brent crude futures, the global oil benchmark, advanced 0.70% to $92.52 per barrel.

“We expect the rupee to trade with a slight negative bias on expectations that the U.S. Dollar may rise further. Elevated crude oil prices and selling pressure from foreign investors may put further pressure on the rupee,” Mr. Choudhary said.

However, any intervention by the Reserve Bank of India and positive domestic markets may support the rupee at lower levels, Mr. Choudhary said, adding that traders may remain cautious ahead of retail sales and PPI data from the U.S., expected to be softer than the previous month.

On the domestic equity market front, the 30-share BSE Sensex closed 52.01 points or 0.08% higher at 67,519.00. The broader NSE Nifty advanced 33.10 points or 0.16% to 20,103.10.

Foreign Institutional Investors (FIIs) were net sellers in the capital market on Wednesday as they offloaded shares worth ₹1,631.63 crore, according to exchange data.