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| Photo Credit: Reuters

The rupee gained slightly on Wednesday (August 7, 2024) aided by a broad improvement in risk appetite but strong dollar bids in the non-deliverable forward (NDF) market and importers’ hedging demand are likely to keep the currency’s gains in check, traders said.

The rupee was at 83.9150 against the U.S. dollar as of 10:50 a.m., up slightly from its close at 83.9525 in the previous session.

The currency had fallen to its all-time low of 83.96 on Tuesday hurt by a decline in its Asian peers and due to pressure from unwinding of carry trades that funded long bets on the rupee using the Chinese yuan and the Japanese yen.

Weakness in the rupee was capped by intervention by the Reserve Bank of India alongside instructions to top banks to refrain from excessive speculation against the rupee as the currency came close to falling below 84/$.

On Wednesday, dollar bids from importers alongside consistent dollar demand in the NDF market limited the rupee’s gains, traders said.

The dollar index was up 0.3% at 103.3 while most Asian currencies slipped as markets settled after being gripped by heightened volatility over the last two trading sessions spurred by unwinding of carry trades and concerns of a slowdown in the U.S.

“In the short term, the Fed will likely support the USD by pushing back the market’s aggressive bets for 100 bps of cuts in the remaining three FOMC meetings this year,” DBS Bank said in a note.

Benchmark Indian equity indices, the BSE Sensex and Nifty 50 were up over 1% each after falling for the last two trading sessions which saw foreign investors pull out over $1.5 billion from local stocks amid a slump in global equities.

The rupee depreciated 4 paise to settle at 83.52 (provisional) against the U.S. dollar on Wednesday, weighed down by elevated crude oil prices.

Forex traders said the Indian rupee depreciated on strength in crude oil prices, which touched a two-week high on Tuesday. However, a firm tone in domestic markets and favourable macroeconomic data cushioned the downside.

At the interbank foreign exchange market, the local unit opened at 83.51 and hit the intraday high of 83.49 and a low of 83.56 against the American currency during the session.

It finally settled at 83.52 (provisional) against the dollar, 4 paise lower than its previous close.

On Tuesday, the rupee depreciated 4 paise to settle at 83.48 against the U.S. dollar.

“We expect the rupee to trade with a slight positive bias on softening of the U.S. dollar and rise in global risk sentiments. Strength in the domestic markets may also support sentiments,” said Anuj Choudhary – Research Analyst at Sharekhan by BNP Paribas “However, elevated crude oil price and FII outflows may cap sharp upside. Traders may take cues from ADP non-farm employment, weekly unemployment claims, ISM services PMI, Challenger job cuts, trade balance and factory orders data from the U.S. Investors may remain cautious ahead of FOMC meeting minutes,” Mr. Choudhary said.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.10% lower at 105.61.

Brent crude futures, the global oil benchmark, were trading 0.09% higher at $86.32 per barrel.

In the domestic equity market, Sensex hit the historic 80,000-mark and Nifty scaled a fresh lifetime high. The 30-share BSE Sensex finally ended the day 545.35 points, or 0.69%, up at 79,986.80 points. The broader NSE Nifty settled 162.65 points, or 0.67%, higher at 24,286.50 points.

Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Tuesday, as they offloaded shares worth ₹2,000.12 crore, according to exchange data.

On the domestic macroeconomic front, India’s services sector growth quickened in June from May’s five-month low.

The seasonally adjusted HSBC India Services Business Activity Index rose from 60.2 in May to 60.5 in June, pointing to a sharp expansion in output.

The rupee depreciated 6 paise to settle at 83.50 (provisional) against the U.S. dollar on Tuesday, weighed down by a strong greenback in the overseas market and elevated global crude oil prices.

Besides, a muted trend in domestic equities and foreign fund outflows dented investor sentiments, forex traders said.

At the interbank foreign exchange market, the local unit opened at 83.51 and hit the intraday high of 83.47 and a low of 83.56 against the American currency during the session.

It finally settled at 83.50 (provisional) against the dollar, 6 paise lower than its previous close.

On Monday, the rupee depreciated 10 paise to settle at 83.44 against the U.S. dollar.

“We expect the rupee to trade with a slight negative bias as the strength in the U.S. Dollar and surge in crude oil prices may keep the rupee under downside pressure,” said Anuj Choudhary – Research Analyst at Sharekhan by BNP Paribas.

Mr. Choudhary further said the overall positive trend in the domestic markets and expectations of fresh foreign inflows may support the rupee at lower levels. Traders may take cues from Fed Chair Jerome Powell’s speech and JOLTS job openings data from the U.S.

“USD/INR spot price is expected to trade in a range of ₹83.20 to ₹83.75,” Mr. Choudhary said.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.09% higher at 105.99.

Brent crude futures, the global oil benchmark, were trading 0.76% higher at $87.26 per barrel.

In the domestic equity market, the 30-share BSE Sensex fell 34.74 points, or 0.04%, to close at a new peak of 79,441.45 points. The broader NSE Nifty settled 18.10 points, or 0.07%, lower at 24,123.85 points.

Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Monday, as they offloaded shares worth ₹426.03 crore, according to exchange data.

Reports of selling of dollars by state-run banks also supported the rupee.  File
| Photo Credit: REUTERS

The rupee appreciated 13 paise to settle at 83.42 (provisional) against the U.S. dollar on Tuesday, buoyed by fresh inflow of foreign capital and a firm trend in domestic equity markets, wherein benchmark indices scaled new peaks.

Forex traders said reports of dollar selling by public sector banks supported the Indian currency. However, higher crude oil prices capped the gains in the local unit.

At the interbank foreign exchange market, the local unit opened at 83.52 and hit the intraday high of 83.39 against the greenback during the session.

It finally settled at 83.42 (provisional) against the dollar, registering a gain of 13 paise from its previous close.

On Friday, the rupee had settled 1 paisa lower at 83.55 against the U.S. dollar.

Forex markets were closed on Monday on account of Bakri Id.

Anuj Choudhary, Research Analyst at Sharekhan by BNP Paribas, said the rupee gained as domestic markets hit new all-time highs and amid fresh foreign fund inflows.

“Reports of selling of dollars by state-run banks also supported the rupee. However, a positive tone in the U.S. dollar and surge in crude oil prices capped sharp gains,” he said, adding, “USD-INR spot price is expected to trade in a range of ₹83.10 to ₹83.70.” Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading at 105.06, higher by 0.12%.

According to analysts, the U.S. dollar gained after hawkish comments by officials of the U.S. Federal Reserve, while market participants were awaiting further cues from retail sales and industrial production data from the U.S.

Brent crude futures, the global oil benchmark, declined 0.33% to $83.97 per barrel.

In the domestic equity market, the 30-share BSE Sensex rose 308.37 points, or 0.40%, to close at a new peak of 77,301.14 points. The broader NSE Nifty settled 92.30 points, or 0.39%, higher to close at an all-time high of 23,557.90 points.

Foreign Institutional Investors (FIIs) were net buyers in the capital markets on Friday, as they purchased shares worth ₹2,175.86 crore, according to exchange data.

Analysts attributed the strong investor sentiment to the firm domestic macroeconomic outlook.

Fitch Ratings on Tuesday raised India’s growth forecast for current fiscal to 7.2%, from 7% projected in March, citing a recovery in consumer spending and increased investment.

Meanwhile, India’s forex reserves jumped $4.307 billion to a new all-time high of $655.817 billion for the week ended June 7, the Reserve Bank of India (RBI) on Friday.

The kitty had jumped $4.837 billion to $651.51 billion in the previous reporting week.

The rupee consolidated in a narrow range and settled for the day lower by 7 paise at 83.55 (provisional) against the U.S. dollar on Thursday even as both the domestic equity benchmark indices touched all-time high levels.

Forex traders said rupee was seen resilient against the dollar, even after volatility witnessed in the dollar index, due to CPI data and U.S. Fed’s policy decision.

At the interbank foreign exchange, the local unit opened at 83.52 and finally settled for the day lower by 7 paise at 83.55 (provisional) against the American currency.

On Wednesday, the rupee appreciated 11 paise to close at 83.48 against the U.S. dollar.

“Rupee traded sideways in a range of 83.52-83.57 with stability. Even after volatility witnessed in the dollar index, due to CPI data and Fed’s policy decision, the rupee was seen resilient against the dollar.”

“Now the trend in rupee will remain range bound but underlying tone remains weak as rupee consolidation continues near all-time low. Major fall in dollar below $103 only will give strong rupee buying above 83.00 till then 83.20-83.75 approx range will be seen,” said Jateen Trivedi, VP Research Analyst – Commodity and Currency, LKP Securities.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading at 104.81, higher by 0.17%.

Brent crude futures, the global oil benchmark, declined 0.84% to $81.91 per barrel.

On the domestic macroeconomic front, India’s industrial production growth slipped to 3-month low of 5% in April 2024, mainly due to poor show by the manufacturing sector, though mining and power segments performed well, according to official data.

Meanwhile, retail inflation continued its downward slide to reach a one-year low of 4.75% in May due to a marginal decline of prices in the food basket and remained within the Reserve Bank’s comfort zone of below 6%, according to government data released on Wednesday.

On the domestic equity market, the 30-share BSE Sensex rose 204.33 points, or 0.27%, to close at a new peak of 76,810.90 points. The broader NSE Nifty settled 75.95 points or 0.33% higher at a record level of 23,398.90 points.

Foreign Institutional Investors (FIIs) were net buyers in the capital markets on Wednesday as they purchased shares worth ₹426.63 crore, according to exchange data.

At the interbank foreign exchange market, the local unit opened at 83.56. 
| Photo Credit: REUTERS

Rupee appreciated 3 paise to close at 83.56 (provisional) against the U.S. dollar on Wednesday, on positive domestic market, wherein benchmark sensitive index Nifty touched a fresh all-time high.

Forex traders said rupee is trading in a narrow range as all eyes are on the U.S. May CPI print and the U.S. Federal Reserve’s rate decision on the global front and India’s Consumer Price Index (CPI) on the domestic front.

Moreover, the strength of the American currency in the overseas market and elevated crude oil prices weighed on the local unit and restricted the upmove.

At the interbank foreign exchange market, the local unit opened at 83.56. During the trading session, the rupee touched an intraday high of 83.51 and a low of 83.56. It finally settled for the day at 83.56 (provisional) against the greenback, registering an increase of 3 paise from its previous closing level.

On Tuesday, the rupee settled for the day lower by 9 paise at 83.59 against the U.S. dollar.

The Indian rupee appreciated on positive domestic markets. Nifty touched a fresh all-time high. However, a positive U.S. dollar and surge in crude oil prices capped sharp gains, said Anuj Choudhary – Research Analyst at Sharekhan by BNP Paribas.

“We expect the rupee to trade with a slight negative bias as U.S. dollar is expected to strengthen amid expectations of a no change in Federal Open Market Committee (FOMC) meeting.”

“However, investors would watch out for Fed Chair Jerome Powell’s speech for cues on rate cut. Traders may take cues from India’s CPI and IIP data. Traders may also take cues from CPI data from the U.S. USD-INR spot price is expected to trade in a range of ₹83.20 to ₹84,” Mr. Choudhary added.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading at 105.20, lower by 0.03%. The U.S. dollar gained on expectations of further delay in first interest rate cut by the U.S. Federal Reserve.

Brent crude futures, the global oil benchmark, rose 1.11% to $82.83 per barrel.

On the domestic equity market, the 30-share BSE Sensex advanced 149.98 points, or 0.20%, to close at 76,606.57 points. The broader NSE Nifty settled 58.10 points, or 0.25%, higher to settle at an all-time high of 23,322.95 points.

Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Tuesday, selling shares worth ₹111.04 crore, according to exchange data.

The rupee plunged 26 paise to 83.40 against the U.S. dollar in early trade on Tuesday as initial counting for the Lok Sabha elections indicated a mixed trend.

A weak trend in domestic equity markets also dented sentiments in early deals, forex traders said.

According to television reports, the BJP-led NDA surged ahead with leads in more than 200 parliamentary seats out of 350 for which trends were available, with the opposition INDIA bloc ahead in 120.

Counting of votes for the Lok Sabha elections began on Tuesday morning across states and Union Territories.

At the interbank foreign exchange market, the local unit opened weak at 83.25 and lost further ground to trade at 83.40 against the greenback in initial deals, registering a fall of 26 paise from its previous close.

On Monday, the rupee closed at 83.14 against the U.S. dollar.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.05% lower at 104.02.

Brent crude futures, the global oil benchmark, fell 0.61% to $77.88 per barrel.

On the domestic equity market, benchmark equity indices Sensex and Nifty tanked in early trade as initial counting for the Lok Sabha polls showed a mixed trend.

The 30-share index dropped 1,715.78 points to 74,753 in early trade. The NSE Nifty tumbled 539.1 points to 22,724.80.

Foreign investors were net buyers of Indian equities on Monday as they purchased shares worth ₹6,850.76 crore on a net basis. FIIs bought shares worth ₹23,451.26 crore and sold equities worth ₹16,600.50 crore in the cash segment.

File Photo
| Photo Credit: REUTERS

The rupee rallied for the fourth consecutive trading session on May 24 and appreciated by 18 paise to settle at 83.11 (provisional) against the U.S. dollar on fresh foreign fund inflows and suspected intervention by the RBI.

Forex traders attributed the rally to ₹2.11 lakh crore record dividend by the RBI to the government for the fiscal ended March 31. It was more than double the budgeted expectation, helping shore up revenue ahead of a new government taking office.

At the interbank foreign exchange, the domestic unit opened at 83.26 and moved in the range of 83.03 and 83.26 against the greenback during the session.

The local unit finally settled at 83.11 (provisional) against the dollar, registering a rise of 18 paise from its previous close. In the last four trading sessions the local unit has added 39 paise against the American currency.

The forex market was closed on May 23 on account of ‘Buddha Purnima’.

On Wednesday, the rupee appreciated by 2 paise to settle at 83.29 against the U.S. dollar.

“The Indian rupee gained on suspected intervention by the Reserve Bank of India (RBI). The RBI’s ₹2.11 lakh crore dividend to the government also boosted market sentiments.

“Fresh FII inflows and a decline in crude oil prices also supported the rupee. The U.S. dollar strengthened as markets trimmed rate cut bets amid hawkish U.S. data and hawkish Federal Open Market Committee (FOMC) meeting minutes,” 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, declined 0.22% to 104.88.

Brent crude futures, the global oil benchmark, slipped 0.70% to $80.79 per barrel.

“We expect the rupee to trade with a positive bias on positive domestic equities and overall weakness in crude oil prices. However, weak global markets and strong dollar on hawkish U.S. data may cap sharp gains,” Mr. Choudhary said.

Traders may take cues from durable goods orders and revised consumer sentiment data from the U.S. USD-INR spot price is expected to trade in a range of ₹82.80 to ₹83.30, Mr. Choudhary added.

On the domestic equity market front, benchmark equity indices scaled new peaks in intra-day trade before ending flat.

The 30-share Sensex declined 7.65 points, or 0.01%, to settle at 75,410.39 points, and Nifty fell 10.55 points, or 0.05%, to close at 22,957.10 points.

Foreign Institutional Investors (FIIs) were net buyers in the capital markets on May 23, as they purchased shares worth ₹4,670.95 crore, according to exchange data.

The rupee appreciated by 3 paise to settle at 83.28 (provisional) against the U.S. dollar on Wednesday amid softening crude oil prices.

Forex traders said the local unit consolidated in a narrow range weighed down by foreign fund outflows.

At the interbank foreign exchange, the domestic unit opened at 83.29 and moved in the range of 83.22 and 83.29 against the greenback during the session.

The local unit finally settled at 83.28 (provisional) against the dollar, registering a rise of 3 paise from its previous close.

The Indian rupee gained on positive domestic markets and a decline in crude oil prices. However, mixed to positive U.S. Dollar and FII outflows capped sharp gains, said Anuj Choudhary – Research Analyst at Sharekhan by BNP Paribas.

“We expect the rupee to trade with a slight negative bias as the U.S. Dollar may recover from lower levels if the Federal Open Market Committee (FOMC) meeting minutes are hawkish,” Mr. Choudhary said.

FII outflows may also weigh on the rupee. However, a positive tone in the domestic markets and weakness in crude oil prices may support the rupee at lower levels, Mr. Choudhary added.

Investors may remain cautious ahead of PMI data from the U.S. this week. USDINR spot price is expected to trade in a range of ₹83 to ₹83.55, Mr. Choudhary added.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, advanced 0.09% to 104.75, as most Fed officials warned of cutting interest rates too early and need more data to cut rates.

Brent crude futures, the global oil benchmark, slipped 0.69% to $82.31 per barrel.

On the domestic equity market front, Sensex advanced 267.75 points, or 0.36%, to settle at 74,221.06 points, and Nifty rose 68.75 points, or 0.31%, to close at 22,597.80 points.

Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Tuesday, as they offloaded shares worth ₹1,874.54 crore, according to exchange data.

On the macroeconomic front, according to an article in the RBI’s May Bulletin released on Tuesday, India is likely to grow by 7.5% in the first quarter of the current financial year, driven by rising aggregate demand and non-food spending in the rural economy.

The rupee stayed range-bound and settled 4 paise lower at 83.50 (provisional) against the U.S. dollar on May 16, weighed down by unabated foreign fund outflows amid investors’ weak appetite for riskier assets.

However, a firm trend in domestic equities supported the local unit and restricted its losses, forex traders said.

The rupee remains under pressure due to ongoing elections and foreign fund outflows, and the same shall subside once the results are out, they added.

At the interbank foreign exchange market, the local unit traded in a narrow range. It opened at 83.45 and touched an intraday high of 83.44 and a low of 83.50.

The domestic unit finally settled for the day at 83.50 (provisional), down 4 paise from its previous close.

On May 15, the rupee had settled at 83.46 against the U.S. dollar.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading at 104.40, higher by 0.06%.

Brent crude futures, the global oil benchmark, fell 0.33% to $82.48 per barrel.

Oil price has corrected substantially following a surge to $93 per barrel and is currently hovering around $82 per barrel. This decline in oil prices is set to have a beneficial effect on India’s trade balance, especially considering that petroleum products make up 25% of its total import spending, according to experts.

The reduced oil prices are anticipated to ease the strain on the trade deficit, providing a more positive outlook for the rupee.

On the domestic equity market, the 30-share BSE Sensex advanced 676.69 points, or 0.93%, to close at 73,663.72 points. The broader NSE Nifty settled 203.30 points or 0.92% higher at 22,403.85 points.

Foreign Institutional Investors (FIIs) were net sellers in the capital markets on May 15, as they offloaded shares worth ₹2,832.83 crore, according to exchange data.