The rupee strengthens against the dollar, supported by a positive equities trend
| Photo Credit: The Hindu

The Rupee appreciated 8 paise to 83.89 against the U.S. dollar in early trade on Friday (August 9, 2024), supported by a positive trend in domestic equities and a decline in the U.S. dollar index.

Forex traders said that after the Reserve Bank of India’s monetary policy announcement, markets now await U.S. CPI data, India CPI, WPI and IIP data and India’s trade data, all scheduled to be released next week.

“The Jackson Holes Symposium to be held after next week will also remain in focus,” traders said.

At the interbank foreign exchange, the rupee opened at 83.95 against the greenback, then touched 83.89, registering a rise of 8 paise over its previous closing price.

On Thursday (August 8, 2024), the rupee consolidated in a narrow range and settled for the day lower by 2 paise at 83.97 against the U.S. dollar.

“The rupee was protected by the Reserve Bank of India (RBI) at 83.96 for this week and the local unit is likely to trade in a narrow range of 83.90/84.00 for the day after the RBI kept key benchmark rates on hold,” said Anil Kumar Bhansali, Head of Treasury and Executive Director of Finrex Treasury Advisors LLP.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.03% lower at 103.17.

Brent crude, the global oil benchmark, advanced 0.15% to $79.28 per barrel. “Brent oil prices rose to $79.22, a 3% weekly gain, on rising Middle East tensions and better than expected U.S. jobless claims data, giving a better outlook on the U.S. economy,” Mr. Bhansali added.

Market analysts said while the rupee seems to be tilting towards a negative bias, sharp fluctuations are not anticipated.

Meanwhile, the Monetary Policy Committee (MPC) of the Reserve Bank kept the benchmark repurchase or repo rate unchanged at 6.50%. Announcing the bi-monthly monetary policy review RBI Governor Shaktikanta Das said, “The Indian rupee has remained largely range-bound so far this financial year.”

Mr. Das further noted that the country’s forex reserves touched a record high of $675 billion as of August 2.

On the domestic equity market front, Sensex surged 958.63 points, or 1.22%, to 79,844.85 points. The Nifty advanced 280.70 points, or 1.16%, to 24,397.70 points.

“Foreign institutional investors (FIIs) were net sellers in the capital markets on Thursday (August 8, 2024), as they offloaded shares worth ₹2,626.73 crore,” according to exchange data.

On August 1, the Rupee declined five paise to settle at 83.73 against the U.S. dollar.
| Photo Credit: The Hindu

The Rupee turned flat at 83.73 against the U.S. currency on August 2 amid weak equity markets and an upward movement in crude oil prices overseas.

According to forex traders, “the Indian currency found support due to softening the dollar against major rivals following the U.S. Federal Reserve’s decision to maintain the status quo on interest rates and some inflows of foreign capital into Indian equities.”

At the interbank currency exchange, the domestic currency opened at 83.74 and inched up to trade at 83.73 against the dollar, the previous day’s closing level. On August 1, the Rupee declined five paise to settle at 83.73 against the U.S. dollar.

Anand James, Chief Market Strategist of Geojit Financial Services, said the Rupee’s weakness was capped by “a likely intervention from the Reserve Bank of India”.

“The next key U.S. economic release is the July jobs report, expected on August 2,” he added.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.07% to 104.13. Brent crude — the global oil benchmark — rose by 0.79% to $80.15 per barrel in futures trade.

In the domestic equity market, the 30-share BSE Sensex plunged 614.96 points or 0.75% to 81,252.59 in morning trade, while the broader Nifty declined 194.80 points or 0.78% to 24,816.10.

“Foreign institutional investors were net buyers in the capital markets on August 1 and bought shares worth ₹2,089.28 crore, “ according to exchange data.

A monthly survey released on August 1 showed India’s manufacturing sector growth eased slightly to 58.1 in July from 58.3 in June on softer increases in new orders and output, while cost pressures and demand strength led to the steepest increase in selling prices since October 2013.

“The government’s GST collections in July rose 10.3% to more than ₹1.82 lakh crore, driven by domestic transactions in goods and services,” according to official data released on August 1.

On May 29, the Rupee pared initial gains to settle five paise lower at 83.18 against the U.S. dollar.
| Photo Credit: The Hindu

The Rupee depreciated nine paise to 83.27 against the U.S. dollar on May 29, tracking a negative trend in domestic equities and elevated crude oil prices.

Forex traders said the local unit faced some resistance due to subdued sentiment in the domestic equity market and strengthening of the American currency in the overseas market.

At the interbank foreign exchange market, the local unit opened at 83.22 and lost further ground to trade at 83.27 against the greenback, registering a loss of nine paise from its previous closing level. On Tuesday, the Rupee pared initial gains to settle five paise lower at 83.18 against the U.S. dollar.

“The Indian Rupee was sold off on Tuesday as oil and probably the Reserve Bank of India (RBI) bought dollars (about $1 billion) to keep Rupee appreciation in control before the month-end and the Lok Sabha election results,” said Anil Kumar Bhansali, Head of Treasury and Executive Director, Finrex Treasury Advisors LLP.

“The USD/INR pair is likely to trade with a narrow range of 83.15/25 during the day,” Mr. Bhansali added. Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading at 104.72, higher by 0.11%.

Brent crude futures, the global oil benchmark, advanced 0.21% to $84.40 per barrel. On the domestic equity market, the 30-share BSE Sensex was trading 227.75 points, or 0.30% lower at 74,942.70 points. The broader NSE Nifty fell 74.30 points or 0.32% to 22,813.85 points in initial trade.

Foreign Institutional Investors (FIIs) were net buyers in the capital markets on Tuesday, as they purchased shares worth ₹65.57 crore, according to exchange data.

The Rupee appreciated six paise to close at 83.31 against the U.S. dollar on May 21 following a weak greenback against major currencies overseas and softening crude oil prices in international markets.

“However, a sluggish trend in the domestic equity markets restricted the sharp upside in the local currency,” forex traders said.

At the interbank foreign exchange market, the local unit opened strong at 83.32 and touched an intraday high of 83.26 and a low of 83.36. The domestic unit finally settled at 83.31 (provisional), a gain of six paise from its previous close. On May 17, the Rupee had settled at 83.37 against the U.S. dollar.

The forex market was closed on May 20 on account of general elections. “A decline in crude oil prices and fresh foreign inflows also supported the rupee. “The U.S. Dollar softened on rate cut expectations by Fed but hawkish comments by Fed officials supported the U.S. dollar at lower levels,” Anuj Choudhary – Research Analyst at Sharekhan by BNP Paribas,” said.

On the domestic equity market front, the 30-share BSE Sensex fell 52.63 points or 0.07% to settle at 73,953.31, while the broader NSE Nifty rose 27.05 points or 0.12% to 22,529.05.

“The Rupee traded positively. This strength is attributed to predictions of the current government winning the general election, leading to increased stability.

“Additionally, Domestic Institutional Investors (DIIs) have been actively buying into capital markets. Soft crude prices and a stable dollar index also supported the Rupee. The expected range for the Rupee in the upcoming sessions is between 83.00 and 83.50,” Jateen Trivedi, VP Research Analyst – Commodity and Currency, LKP Securities, said.

Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Saturday, as they sold shares worth ₹92.95 crore, according to exchange data.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.07% to 104.38. Brent crude futures, the global oil benchmark, declined 0.97% to $82.90 per barrel.

At the interbank foreign exchange market, the local unit opened at 83.50 and touched an intraday high of 83.32 and a low of 83.50.
| Photo Credit: The Hindu

Rupee appreciated 17 paise to close at 83.33 (provisional) against the U.S. dollar on May 17, on positive domestic markets and expectations of some fresh foreign inflows.

“Reports of selling of U.S. dollars by the Reserve Bank of India also supported the Rupee,” forex traders said.

At the interbank foreign exchange market, the local unit opened at 83.50 and touched an intraday high of 83.32 and a low of 83.50. The domestic unit finally settled at 83.33 (provisional), a rise of 17 paise from its previous close. On May 16, the Rupee had settled at 83.50 against the U.S. dollar.

“We expect the Rupee to trade with a slight negative bias on strengthening of the U.S. dollar amid hawkish Fed speak and weak Asian and European markets. However, a positive tone in domestic markets may support the Rupee at lower levels.

“Any fresh FII inflows and/or RBI intervention may support Rupee at lower levels. USD-INR spot price is expected to trade in a range of ₹83.20 to ₹83.70,” 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 at 104.73, higher by 0.26%. Brent crude futures, the global oil benchmark, rose 0.13% to $83.38 per barrel.

On the domestic equity market, the 30-share BSE Sensex advanced 253.31 points or 0.34% to close at 73,917.03 points. The broader NSE Nifty settled 62.25 points or 0.28%, higher at 22,466.10 points.

Foreign Institutional Investors (FIIs) were net sellers in the capital markets on May 16, as they offloaded shares worth ₹776.49 crore, according to exchange data.

Rupee finally settled at 83.50 (provisional), higher by one paisa from its previous close.
| Photo Credit: Reuters

The Rupee inched up one paisa to settle at 83.50 (provisional) against the U.S. dollar on May 15 as the American currency retreated from its elevated level. However, sustained foreign fund outflows and a weak trend in domestic equities weighed on the local unit.

With foreign investors buying the U.S. dollars and the Reserve Bank of India (RBI) selling the greenback, the USD/INR pair is expected to remain range-bound with a bit of a weakness bias, according to forex traders.

At the interbank foreign exchange market, the local unit opened at 83.49. During the session, it traded in a narrow range of 83.51-83.47. The domestic unit finally settled at 83.50 (provisional), higher by one paisa from its previous close.

The Rupee gained on weakness in the U.S. Dollar. However, weak domestic markets and FII selling capped sharp gains, said Anuj Choudhary – Research Analyst at Sharekhan by BNP Paribas.

“We expect the Rupee to trade with a slight negative bias on the weak U.S. Dollar and expectations that the U.S. Dollar may rise again if inflation remains sticky and retail sales jumps,” Mr. Choudhary said, adding that FII outflows and a rise in crude oil prices may also weigh on the Rupee.

“Traders may take cues from India’s trade balance data and CPI and retail sales data from the U.S. USD-INR spot price is expected to trade in a range of ₹83.30 to ₹83.80,” Mr. Choudhary said.

India’s merchandise exports in April 2024 marginally rose to $34.99 billion from $34.62 billion in the year-ago month, according to government data released on May 15.

Imports too increased to $54.09 billion from $49.06 billion in April 2023. The trade deficit, or the gap between imports and exports, during the month stood at $19.1 billion.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was at 104.85, lower by 0.15%, as Fed Chair, Jerome Powell dismissed the hot PPI data as not so hot after March’s reading was revised lower. Brent crude futures, the global oil benchmark, rose 0.18% to $82.53 per barrel.

On the domestic equity market, the 30-share BSE Sensex declined 117.58 points or 0.16% to close at 72,987.03 points. The broader NSE Nifty settled 17.30 points or 0.08% lower, at 22,200.55 points.

Foreign Institutional Investors (FIIs) were net sellers in the capital markets on May 14, as they offloaded shares worth ₹4,065.52 crore, according to exchange data.

On the macroeconomic front, wholesale inflation rose to a 13-month high of 1.26% in April fuelled by rising prices of food articles, especially vegetables, amid expectations of RBI holding interest rates in the policy review next month.

Meanwhile, Moody’s Ratings on Tuesday said the Indian economy is projected to expand 6.6% in the current fiscal year and said strong credit demand fuelled by robust economic growth will support the NBFC sector’s profitability.

On May 10, the Rupee closed at 83.51 against the American currency.
| Photo Credit: The Hindu

The Rupee was trading in a narrow range against the U.S. dollar in early trade on May 13, tracking a weak trend in domestic equities and strong American currency.

Forex traders said with foreign investors buying U.S. dollars and the Reserve Bank of India (RBI) selling the greenback, the USD/INR pair is expected to remain range-bound with a bit of a weakness bias.

At the interbank foreign exchange market, the local unit moved in a narrow range. It opened at 83.51 against the American currency and touched 83.52 in initial trade, registering a fall of 1 paisa from its previous close. On Friday, the Rupee closed at 83.51 against the American currency.

“Despite short-term pressures on the Rupee, major global factors such as the Israel-Iran conflict and oil prices are normalising. Consequently, considering internal factors such as the Lok Sabha elections passing, the Rupee is poised to align with its robust fundamentals,” CR Forex Advisors MD-Amit Pabari said.

“The downside risk for the Rupee is limited at 83.60. It is anticipated to appreciate to levels between 83 and 83.20 in the near term, with medium-term appreciation ranging from 82.80 to 82.50,” Mr. Pabari added.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was at 105.32, higher by 0.02%. Brent crude futures, the global oil benchmark, fell 0.31% to $82.53 per barrel.

On the domestic equity market, the 30-share BSE Sensex was trading 414.63 points, or 0.57% lower at 72,249.84 points. The broader NSE Nifty was down 105.60 points or 0.48% to 21,949.60 points.

“Foreign Institutional Investors (FIIs) were net sellers in the capital markets on May 10 as they offloaded shares worth ₹2,117.50 crore, according to exchange data. Meanwhile, after three consecutive weeks of drop, India’s forex reserves increased by $3.668 billion to $641.59 billion in the week ended May 3,” the RBI said on Friday.

The overall kitty dropped ₹2.412 billion to ₹637.922 billion for the previous week ended April 26.

Rupee hit an intra-day high of 83.47 and a low of 83.52 against the greenback.
| Photo Credit: The Hindu

The Rupee consolidated in a narrow range and settled higher by one paisa at 83.51 against the U.S. dollar on May 7, amid a negative trend in domestic equities and strong dollar demand.

Forex traders said elevated significant foreign fund outflows in the international market dented investors’ sentiments.

At the interbank foreign exchange market, the local unit opened at 83.48 against the greenback. The unit hit an intra-day high of 83.47 and a low of 83.52 against the greenback.

The domestic unit finally settled at 83.51 (provisional) against the dollar, one paisa higher than its previous close. On Monday, the Rupee settled seven paise lower at 83.52 against the U.S. dollar.

“The Indian Rupee traded almost flat on weak domestic markets and positive U.S. Dollar. FII outflows also weighed on the Rupee,” said Anuj Choudhary Research Analyst, Sharekhan by BNP Paribas.

However, a soft tone in crude oil prices cushioned the downside. The U.S. Dollar gained on weak Asian currencies after the Australian Dollar fell amid a less-hawkish-than-expected tone of the Reserve Bank of Australia (RBA).

“We expect the Rupee to trade with a slight negative bias on weak domestic markets and positive dollar amid geopolitical tensions in the Middle East.”

“However, softness in crude oil prices and positive European and Asian markets may support the Rupee at lower levels. Any intervention by the Reserve Bank of India (RBI) may also support the domestic currency. USD-INR spot price is expected to trade in a range of ₹83.30 to ₹83.75,” Mr. Choudhary added.

Brent crude futures, the global oil benchmark, fell 0.10% to $83.25 per barrel. Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was at 105.26, higher by 0.20%.

On the domestic equity market front, Sensex declined 383.69 points or 0.52% to settle at 73,511.85 points. The Nifty fell 140.20 points or 0.62% to close at 22,302.50 points.

Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Monday, as they offloaded shares worth ₹2,168.75 crore, according to exchange data.

The Rupee had settled seven paise lower at 83.45 against the U.S. dollar on April 29.
| Photo Credit: The Hindu

The Rupee recovered four paise to 83.41 (provisional) against the U.S. dollar on April 29, tracking foreign capital inflows and a strengthening greenback against major crosses overseal.

According to forex analysts, the domestic currency initially faced resistance from a strong greenback and upward momentum in the crude oil prices but recovered the lost ground during the session on the back of a sharp rally in equities in the late afternoon trade.

At the interbank foreign exchange market, the local unit opened at 83.46 and traded between 83.41 and 83.52 against the greenback during the session.

The domestic currency finally settled at 83.41 (provisional) against the dollar, registering a gain of four paise from its previous closing level.

The Rupee had settled seven paise lower at 83.45 against the U.S. dollar on Monday after losing 10 paise in the preceding session on April 26.

Jateen Trivedi, V-P Research Analyst, Commodity and Currency, LKP Securities, said: “Volatility in the capital market kept the Rupee range-bound. Participants are closely monitoring the upcoming interest rate decision in the U.S. for potential price action in the Rupee. Weakness persists in the Rupee, albeit in a stable manner”.

Analysts also said that investors moved cautiously ahead of the U.S. Federal Reserve’s interest rate decision and upcoming macroeconomic data from the U.S. and the domestic manufacturing growth numbers.

The Federal Open Market Committee (FOMC) meeting begins on Tuesday and the interest rate decision is expected to be announced on Wednesday.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, rose 0.13% to 105.58. Brent crude futures, the global oil benchmark, rose 0.15% to $88.53 per barrel.

On the domestic equity market front, Sensex declined 188.50 points or 0.25% to settle at 74,482.78 and Nifty fell 38.55 points or 0.17% to close at 22,604.85.

Foreign institutional investors (FIIs) were net buyers in the capital markets on April 29, as they purchased shares worth ₹169.09 crore on a net basis, according to exchange data.

Representational image only.
| Photo Credit: The Hindu

The Rupee declined seven paise to close at 83.35 (provisional) against the U.S. dollar on April 26 as a strengthening American currency overseas and a selloff in domestic equities weighed on the local unit.

“Besides, rising crude prices in the international market and risk-averse sentiment dragged the local unit down,” forex traders said.

At the interbank foreign exchange market, the local unit opened strong at 83.30 and moved in the range of 83.30-83.36 during the session. The local currency finally settled at 83.35 (provisional) against the dollar, registering a fall of seven paise from its previous close. In the previous session, the Rupee closed at 83.28 against the U.S. dollar.

“Indian Rupee declined slightly on weak domestic markets and a surge in crude oil prices. We expect the Rupee to trade slightly weak on renewed geopolitical tensions in the Middle East and weakness in domestic equities. Rising crude oil prices and FII outflows may further put pressure on the Rupee. However, any intervention by the RBI may support the Rupee at lower levels. We expect USD-INR to trade in the range of 83.10-83.60,” Anuj Choudhary, Research Analyst, Sharekhan by BNP Paribas, said.

Brent crude futures, the global oil benchmark, rose 0.38% to $89.35 per barrel. The dollar index, which gauges the greenback’s strength against a basket of six currencies, increased 0.05% to 105.49. On the domestic equity market front, Sensex slumped 609.28 points, or 0.82% to settle at 73,730.16, and Nifty declined 150.40 points, or 0.67% to close at 22,419.95.

Foreign institutional investors (FIIs) were net sellers in the capital markets on Thursday as they offloaded shares worth ₹2,823.33 crore, according to exchange data.