Forex traders said rupee trade was range-bound as the Reserve Bank of India (RBI) is maintaining a firm grip on the domestic currency.
| Photo Credit: The Hindu

The rupee witnessed range-bound trade and settled for the day higher by 6 paise at 83.90 (provisional) against the US dollar on Friday (September 13, 2024) supported by weakening of the American currency in the overseas market and significant foreign fund inflows.

Forex traders said rupee trade was range-bound as the Reserve Bank of India (RBI) is maintaining a firm grip on the domestic currency.

At the interbank foreign exchange market, the local unit opened at 83.92 and witnessed an intraday high of 83.85 and a low of 83.98 against the American currency.

The domestic unit finally settled for the day at 83.90 (provisional), higher by 6 paise over its previous close.

On Thursday (September 12, 2024), the local unit settled 3 paise higher at 83.96 against the US dollar.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was down 0.46% to 100.90 points.

Brent crude, the international benchmark, gained 1.03% to USD 72.71 per barrel in futures trade.

In the domestic equity market, the 30-share BSE Sensex declined 71.77 points, or 0.09%, to close at 82,890.94 points, while the Nifty fell 32.40 points, or 0.13%, to 25,356.50 points.

Foreign Institutional Investors (FIIs) were net buyers in the capital markets on Thursday (September 12, 2024), as they purchased shares worth ₹7,695.00 crore, according to exchange data.

On the domestic macroeconomic front, retail inflation in August inched up to 3.65%, though vegetables and pulses witnessed price rises in double digits, according to official data released on Thursday (September 12, 2024).

India’s industrial production output decelerated to 4.8% year-on-year in July 2024, mainly due to poor performance of the manufacturing and mining sectors, as per official data released on Thursday (September 12, 2024).

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The rupee traded in a narrow range to settle 4 paise higher at 83.95 (provisional) against the U.S. dollar on Thursday (September 12, 2024) amid a positive trend in domestic equities and foreign fund inflows.

Forex traders said the rupee trade was range-bound, with a slight positive bias toward positive domestic equities. However, a rebound in the U.S. Dollar and a surge in crude oil prices capped sharp gains.

The USD/INR pair traded within a well-defined range on active intervention by the Reserve Bank of India (RBI), they added.

At the interbank foreign exchange market, the local unit opened at 83.97 and witnessed an intraday high of 83.95 and a low of 83.99 against the American currency.

The domestic unit finally settled for the day at 83.95 (provisional), higher by 4 paise over its previous close.

On Wednesday (September 11, 2024), the rupee settled 1 paisa lower at 83.99 against the American currency.

“We expect the rupee to trade with a slight negative bias on the positive U.S. Dollar and a recovery in crude oil prices. However, a rise in risk appetite in global markets may support the rupee. Any intervention by the RBI may support the rupee at lower levels,” said Anuj Choudhary – Research Analyst at Sharekhan by BNP Paribas.

Mr. Choudhary further noted that traders may take cues from India’s CPI data and European Central Bank (ECB) monetary policy. Investors may remain cautious ahead of the U.S. Federal Open Market Committee (FOMC) meeting next week.

Forex traders said risk sentiment has improved after the U.S. August CPI data. The U.S. headline CPI came in lower than expectations at 2.5% year-on-year. Core CPI came in line with expectations at 3.2%.

The stability in the U.S. CPI data helped the dollar index maintain its current levels.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was up 0.06% to 101.74 points.

Brent crude, the international benchmark, gained 1.71% to $71.82 per barrel in futures trade.

In the domestic equity market, the 30-share BSE Sensex advanced 1439.55 points, or 1.77%, to close at 82,962.71 points, while the Nifty climbed 470.45 points, or 1.89%, to 25,388.90 points.

Foreign Institutional Investors (FIIs) were net buyers in the capital markets on Wednesday, as they purchased shares worth ₹1,755.00 crore, according to exchange data.

Forex traders said the crude oil level of $69 per barrel will act as a support for the domestic unit as India, the world’s third-largest oil importer, stands to benefit from cheaper oil.
| Photo Credit: The Hindu

The rupee traded in a narrow range on Wednesday (September 11, 2024) and appreciated 2 paise to 83.96 against the American currency, on easing crude oil prices and tracking its Asian peers.

Forex traders said foreign institutional inflows, alongside significant corrections in asset classes like the dollar index and crude oil prices, supported the rupee, while the Reserve Bank’s active intervention kept the rupee in a tight range.

At the interbank foreign exchange market, the local unit moved in a narrow range. It opened at 83.97 against the American currency and was at 83.96 in initial trade, registering a rise of 2 paise over its previous close.

On Tuesday (September 10, 2024), the rupee depreciated 3 paise to close at 83.98 against the American currency.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was down 0.21% to 101.42 points.

Brent crude, the international benchmark, was trading higher by 0.48% to $69.52 per barrel in futures trade.

Forex traders said the crude oil level of $69 per barrel will act as a support for the domestic unit as India, the world’s third-largest oil importer, stands to benefit from cheaper oil.

“The Indian rupee cannot remain in such a state for long as fundamentals clearly indicated gains for rupee with a fall in oil prices, good economic fundamentals, rise in Asian currencies and rising interest differentials should allow RBI to allow the rise in rupee,” Anil Kumar Bhansali, Head of Treasury and Executive Director Finrex Treasury Advisors LLP.

Bhansali further said that over a longer term, 83.97 looks to be a good selling level for exporters despite a higher Real Effective Exchange Rate (REER), which the Reserve Bank may have to ignore for the moment. For the day, 83.90 to 84.05 should be the range.

On the domestic equity market, the 30-share BSE Sensex declined 104.25 points, or 0.13%, to 81,817.04, while the Nifty was down 33.05 points, or 0.13%, to 25,008.05.

Foreign Institutional Investors (FIIs) were net buyers in the capital markets on Tuesday, as they purchased shares worth ₹2,208.23 crore, according to exchange data.

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| Photo Credit: REUTERS

The rupee traded in a narrow range on Tuesday (September 10, 2024) and depreciated 2 paise to close at 83.97 (provisional) against the American currency, weighed down by the strengthening of the American currency in the overseas market.

Forex traders said the U.S. dollar recovered amid mixed non-farm payrolls data. The slight recovery in crude oil prices also weighed on the rupee. However, a surge in the domestic markets cushioned the downside.

At the interbank foreign exchange market, the local unit opened at 83.95 against the American currency and finally settled at 83.97 (provisional) against the U.S. dollar, down 2 paise from its previous close.

On Monday (September 9, 2024), the rupee traded in a narrow range and closed flat at 83.95 against the American currency.

“We expect the rupee to trade with a slight negative bias on the strong US dollar and concerns over global economic growth. However, positive domestic markets and any intervention by the Reserve Bank of India (RBI) may support the rupee at lower levels,” Anuj Choudhary, Research Analyst at Sharekhan by BNP Paribas, said.

Mr. Choudhary further noted that “investors may remain cautious ahead of the U.S. CPI and ECB monetary policy this week. “USDINR spot price is expected to trade in a range of 83.70 to 84.20,” he said.

On the domestic equity markets front, the Sensex climbed 361.75 points, or 0.44%, to settle at 81,921.29 points, while the Nifty rose 104.70 points, or 0.42%, to close at 25,041.10 points.

The dollar index, which gauges the greenback’s strength against a basket of six currencies, rose 0.03% to 101.58.

Brent crude, the international benchmark, fell 1.16% to 71.01 in futures trade.

Foreign Institutional Investors (FIIs) were net buyers in the capital markets on Monday, as they purchased shares worth ₹1,176.55 crore, according to exchange data.

A customer holds hundred rupees Indian currency notes near a roadside currency exchange stall.
| Photo Credit: Reuters

The Indian rupee witnessed range-bound trading and settled for the day on a flat note at 83.97 (provisional) against the U.S. dollar on Tuesday (August 13, 2024), as weak domestic markets and a surge in crude oil prices weighed on investor sentiments.

Forex traders said risk aversion in the global markets amid heightened geopolitical tension in the Middle East between Israel and Iran also dented sentiments.

At the Interbank Foreign Exchange Market, the local unit traded in a tight range as it opened at 83.95 and finally settled at 83.97 (provisional) against the American currency, unchanged from its previous close.

On Monday, the rupee settled for the day lower by 2 paise at 83.97 against the American currency. The local unit had slumped 37 paise to settle at an all-time low of 84.09 against the U.S. dollar on August 5.

“We expect the rupee to trade with a slight negative bias on risk aversion in the global markets amid heightened geopolitical tension in the Middle East between Israel and Iran. Rising crude oil prices and weak domestic markets may also weigh on the domestic currency,” said Anuj Choudhary, Research Analyst at Sharekhan by BNP Paribas.

However, the mixed-to-weak U.S. dollar amid dovish comments from Fed speakers may support the rupee at lower levels.

“Investors may remain cautious ahead of the U.S. CPI, retail sales, and consumer confidence data from the U.S. this week,” said Mr. Choudhary, adding that the USD-INR spot price is expected to trade in a range of 83.75 to 84.25.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.06% higher at 103.19.

Brent crude, the global oil benchmark, declined 0.27% to $82.08 per barrel.

On the domestic macroeconomic front, the net direct tax collection in the country grew 22.48% to about ₹6.93 lakh crore as of August 11 of this fiscal.

The retail inflation eased to 3.54% with food prices falling after a good monsoon. It was the lowest in the last 5 years and has dipped below RBIs targeted rate of 4%.

However, India’s industrial production slowed to a five-month low of 4.2% in June 2024, mainly due to poor performance of the manufacturing sector, though power and mining sectors continue to perform well, as per official data released on Monday (August 12, 2024).

On the domestic equity market front, Sensex declined 692.89 points, or 0.87%, to 78,956.03 points. The Nifty fell 208.00 points, or 0.85%, to 24,139.00 points.

Foreign institutional investors (FIIs) were net sellers in the capital markets on Monday as they offloaded shares worth Rs 4,680.51 crore, according to exchange data.

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| Photo Credit: REUTERS

The rupee was trading in a narrow range against the U.S. dollar in early trade on May 10, as the support from positive domestic equities was negated by elevated crude oil prices.

Forex traders said the strength of the American currency in the overseas market and significant foreign fund outflows dented investors’ sentiments.

At the interbank foreign exchange market, the local unit opened at 83.48, it touched 83.46 in the initial trade, registering a gain of 2 paise from its previous close.

On May 9, the rupee closed at 83.48 against the American currency.

“The Indian Rupee was again sold-off on May 9 as FPIs outflows continued to trigger demand for the U.S. dollar, while probable RBI selling at 83.50 did not allow a higher up move on the USD/INR pair. On May 10 also the same is expected from the USD/INR pair with RBI continuing its control at 83.50,” said Anil Kumar Bhansali, Head of Treasury and Executive Director Finrex Treasury Advisors LLP.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was at 105.30, higher by 0.07%.

Brent crude futures, the global oil benchmark, rose 0.5% to $84.34 per barrel.

On the domestic equity market, the 30-share BSE Sensex was trading 169.82 points, or 0.23% higher at 72,573.99 points. The broader NSE Nifty was up 67.05 points, or 0.31%, to 22,024.55 points.

Foreign Institutional Investors (FIIs) were net sellers in the capital markets on May 9 as they offloaded shares worth ₹6,994.86 crore, according to exchange data.

“FPIs offloaded ₹22,858 crore in six market sessions in May 2024, while DIIs (Domestic Institutional Investors) were buyers to the tune of ₹16,700 crore. Uncertainty in election results and higher U.S. treasury yields were the main causes of this sell-off,” Mr. Bhansali added.

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The rupee appreciated 14 paise to settle at 83.05 (provisional) against the U.S. dollar on September 29, boosted by a firm trend in equity markets and a sharp correction in the greenback against major rivals overseas.

However, selling pressure from foreign equity investors and rising crude oil prices in international markets weighed on the domestic unit, forex traders said.

The rupee opened strong at 83.13 against the U.S. dollar and moved in the range of 83.03 to 83.13 against the greenback. It finally settled at 83.05 (provisional), registering a gain of 14 paise from its previous close.

On Thursday, the rupee settled 3 paise higher at 83.19

.Analysts said the rupee also strengthened due to a significant decline in India’s current account deficit (CAD). However, rising interest rates and U.S. bond yields prompted foreign investors to stay in selling mode.

CAD almost halved to $9.2 billion, or 1.1%, of GDP in the first quarter of the current fiscal from $17.9 billion (2.1% of GDP) a year ago, the Reserve Bank of India said on Thursday

.Anuj Choudhary, Research Analyst at Sharekhan by BNP Paribas, said: “Indian rupee strengthened on Friday on weak U.S. dollar index and a decline in crude oil prices. Positive tone in domestic markets also strengthened the rupee. However, FII outflows capped sharp gains.”

The dollar declined on concerns over looming U.S. government shutdown fears. Disappointing economic data from the U.S. also weighed on the greenback, he added.

“We expect the rupee to trade with a slight positive bias on as U.S. government shutdown worries may keep the dollar pressure. Recovery in global markets may also support the local currency.

“However, expectations of recovery in crude oil prices and selling pressure from foreign investors may weigh on the rupee,” Mr. Choudhary said, adding “Traders may also take cues from India’s fiscal deficit data. $/₹ spot price is expected to trade in a range of ₹82.70 to ₹83.40”

.Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, declined by 0.52% to 105.68.

Brent crude, the global oil benchmark, was trading 0.36% higher at $95.72 per barrel.

On the domestic equity front, the 30-share BSE Sensex jumped 320.09 points or 0.49% to settle at 65,828.41. The broader Nifty climbed 114.75 points or 0.59% to end at 19,638.30.

Foreign Institutional Investors (FIIs) were net sellers in the capital market on Thursday as they offloaded shares worth ₹3,364.22 crore, according to exchange data.

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The rupee declined by 20 paise to settle at 83.14 (provisional) against the U.S. dollar on September 25 due to rising crude oil prices and a strong American currency against major rivals overseas.

Subdued equity markets and withdrawal of foreign funds also weighed on the domestic currency, forex traders said.

At the interbank foreign exchange market, the local unit opened weak at 83.04 and traded between a high of 83.04 and a low of 83.15 against the greenback.

It finally settled at 83.14 (provisional) against the dollar, registering a fall of 20 paise from the previous close.

On Friday, the rupee climbed 19 paise to close at 82.94 against the U.S. dollar.

Friday’s gain in the rupee was attributed to JP Morgan’s announcement that it will include Indian government securities in its global bond index starting June 2024, a move which is expected to bring in $25-30 billion of inflows into the Indian debt market.

On the other hand, the dollar strengthened due to an increased month-end demand of the American currency by importers and rising U.S. Treasury yield amid concerns of further interest rate hikes by the U.S. Federal Reserve.

Anuj Choudhary, Research Analyst at Sharekhan by BNP Paribas, said, “Indian rupee declined on Monday on a strong dollar and weak domestic equities. Selling pressure from FIIs also put downside pressure on the rupee. US.. dollar gained on hawkish FOMC last week”.

He said the rupee is likely to trade with a slight negative bias on strong dollar and risk aversion in global markets.

“FII outflows and elevated crude oil prices may put further downside pressure on the domestic currency. However, any intervention by the RBI may support the rupee at lower levels. $/₹spot price is expected to trade in a range of ₹82.75 to ₹83.60,” Mr. Chaudhary said.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, rose by 0.08% to 105.67.

Brent crude futures, the global oil benchmark, advanced 0.45% to $93.69 per barrel.

On the domestic equity market front, the BSE Sensex closed 14.54 points or 0.02% higher at 66,023.69. The broader NSE Nifty settled flat at 19,674.55.

India’s foreign exchange reserves declined by $867 million to $593.037 billion in the week ended September 15, the Reserve Bank said on Friday.

Foreign Institutional Investors (FIIs) were net sellers in the capital market on Friday as they offloaded shares worth ₹1,326.74 crore, according to exchange data.

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The rupee continued its upward trend for the second straight session and appreciated by 9 paise to 82.93 against the U.S. dollar in early trade on Septmber 11, tracking positive cues from domestic equity markets and a weak American currency against major overseas rivals.

However, firm crude oil prices hovering above $ 90 per barrel and outflow of foreign funds weighed on the Indian currency, forex traders said.

At the interbank foreign exchange, the domestic unit opened 9 paise higher at 82.93 and traded in a narrow range of 82.90 to 82.96 against the greenback.

Also read | Rupee snaps 4-day losing streak, gains 21 paise against U.S. Dollar

On Friday, the rupee closed at 83.02 against the U.S. dollar.

Gaurang Somaiya, forex and bullion analyst, Motilal Oswal Financial Services, said this week the domestic inflation number will be important to watch and could trigger volatility for the currency.

“Today, volatility for major crosses including the rupee could remain low as no major economic data is expected to release. We expect the USDINR (Spot) to trade sideways with a positive bias and quote in the range of 82.80 and 83.40,” Mr. Somaiya added.

The dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.35% to 104.72.

Brent crude futures, the global oil benchmark, was trading 0.24% lower at $90.43 per barrel.

In the domestic equity market, the 30-share BSE Sensex was trading 201.56 points or 0.30 % higher at 66,800.47. The broader NSE Nifty advanced 69.45 points or 0.35% to 19,889.40.

Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Friday as they offloaded shares worth ₹224.22 crore, according to exchange data.

The rupee fell 2 paise to hit the lowest level of 83.15 against the U.S. dollar in early trade on Thursday amid a strong American currency and elevated crude oil prices.

Forex traders said, massive selling of equities by foreign investors in the past few sessions and subdued market sentiment also put pressure on the Indian currency.

Crude oil breached the level of $90 per barrel after oil producing countries agreed to extend the supply cut till December this year, while dollar strengthened on safe-haven demand.

At the interbank foreign exchange, the domestic unit opened at 83.15 against the dollar, 2 paise lower from its previous close. The unit traded in a narrow range of 83.14 to 83.16 against the greenback.

On Wednesday, the rupee declined by 9 paise to close at 83.13 against the dollar. Earlier, the rupee had touched the level of 83.13 on August 21 this year.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, fell marginally by 0.01% to 104.85.

Brent crude futures, the global oil benchmark, was trading 0.21% lower at $90.41 per barrel.

In the domestic equity market, the 30-share BSE Sensex was trading 156.01 points or 0.24% lower at 65,724.51. The broader NSE Nifty declined 47.10 points or 0.24% to 19,563.95.

Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Wednesday as they offloaded shares worth ₹3,245.86 crore, according to exchange data.