Latest news with #AnindyaBanerjee
Economic Times
01-08-2025
- Business
- Economic Times
Rupee hits record low of 87.59/$ on tariff, outflow worries
The Indian rupee closed at a record low of 87.59 per dollar on Thursday, pressured by U.S. tariff threats, foreign outflows, and strong dollar demand. RBI intervened multiple times to limit losses, but persistent pressure from importers capped recovery. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Indian rupee closed at a record low of 87.59 per US dollar on Thursday, weighed down by U.S. tariff concerns, persistent outflows from local equities, and a strong dollar through the trading day, the rupee touched its weakest level at 87.74/$1. It pared losses later to close slightly stronger, likely due to central bank intervention, traders rupee had closed at 87.42/$1 Wednesday, LSEG data local unit weakened after the Oval Office said it would impose a 25% baseline tariff on imports from India, alongside an unspecified penalty, starting August 1. That compares with an earlier announced baseline tariff of 10%."Importers started to hedge as soon as the rupee crossed 86.90/$1 previously. I think the central bank will intervene and will not let the rupee cross record low levels," said Anindya Banerjee, head of FX research, Kotak weakness seen in the past two days has caused importers to frontload their near-term hedging, dealers said. Market participants expect the RBI to defend record low levels, as a breach there would trigger multiple stop Reserve Bank of India (RBI) intervened at multiple levels today, but constant dollar demand from oil companies and local institutions added consistent pressure.'The rupee was saved to some extent by the RBI, who sold dollars first at 87.75/$1 levels and then at 87.65/$1 levels to bring it down to 87.50/$1. From here constant dollar buying ensured that the close was at the lowest,' said Anil Bhansali, head of treasury at Finrex Treasury dollar index strengthened to 99.8 levels from 97.6 seen at the start of the week. Meanwhile, Asian currencies fell on Thursday, due to weak Chinese economic data and the approaching August 1 U.S. tariff deadline, LSEG data risk management advisor KN Dey said lack of clarity on penalty has created panic among market importers.'In a storm like this, exporters should try to avoid entering the market and wait for some clarity on tariff to emerge while importers should hedge their short to medium term position,' he said.
Time of India
01-08-2025
- Business
- Time of India
Rupee hits record low of 87.59/$ on tariff, outflow worries
Indian rupee closed at a record low of 87.59 per US dollar on Thursday, weighed down by U.S. tariff concerns, persistent outflows from local equities, and a strong dollar index. Earlier through the trading day, the rupee touched its weakest level at 87.74/$1. It pared losses later to close slightly stronger, likely due to central bank intervention, traders said. Explore courses from Top Institutes in Please select course: Select a Course Category Design Thinking PGDM healthcare Others Degree Technology others Artificial Intelligence Data Science Management Finance Healthcare Operations Management Product Management Leadership Cybersecurity MBA Project Management CXO Public Policy Data Analytics Data Science Digital Marketing MCA Skills you'll gain: Duration: 22 Weeks IIM Indore CERT-IIMI DTAI Async India Starts on undefined Get Details Skills you'll gain: Duration: 25 Weeks IIM Kozhikode CERT-IIMK PCP DTIM Async India Starts on undefined Get Details The rupee had closed at 87.42/$1 Wednesday, LSEG data showed. The local unit weakened after the Oval Office said it would impose a 25% baseline tariff on imports from India, alongside an unspecified penalty, starting August 1. That compares with an earlier announced baseline tariff of 10%. "Importers started to hedge as soon as the rupee crossed 86.90/$1 previously. I think the central bank will intervene and will not let the rupee cross record low levels," said Anindya Banerjee, head of FX research, Kotak Securities. The weakness seen in the past two days has caused importers to frontload their near-term hedging, dealers said. Market participants expect the RBI to defend record low levels, as a breach there would trigger multiple stop losses. The Reserve Bank of India (RBI) intervened at multiple levels today, but constant dollar demand from oil companies and local institutions added consistent pressure. 'The rupee was saved to some extent by the RBI, who sold dollars first at 87.75/$1 levels and then at 87.65/$1 levels to bring it down to 87.50/$1. From here constant dollar buying ensured that the close was at the lowest,' said Anil Bhansali, head of treasury at Finrex Treasury Advisors. The dollar index strengthened to 99.8 levels from 97.6 seen at the start of the week. Meanwhile, Asian currencies fell on Thursday, due to weak Chinese economic data and the approaching August 1 U.S. tariff deadline, LSEG data showed. Currency risk management advisor KN Dey said lack of clarity on penalty has created panic among market importers. 'In a storm like this, exporters should try to avoid entering the market and wait for some clarity on tariff to emerge while importers should hedge their short to medium term position,' he said.
Economic Times
30-07-2025
- Business
- Economic Times
Buy the dip in gold? Rupee range & Fed impact explained
Silver may outperform gold, supported by strong base metal fundamentals,' says Anindya Banerjee, Senior VP & Head of Research – Currency, Commodity & Interest Rate at Kotak Securities. He breaks down what's driving the correction in gold and silver, the rebound in the dollar index, and the outlook for USD-INR. Excerpts: ADVERTISEMENT Q. Last week, both metals experienced heavy profit taking. How much of this correction can be attributed to the rebound in the dollar index and the US-Japan trade development? Anindya Banerjee: The relationship between bullion and the dollar index is strong. In addition, interest rate expectations from the Federal Reserve play an important role. Regarding the trade deals, the US recently signed important agreements with Japan and the European Union, and there has been a 90-day extension in the de-escalation between China and the US. These developments create a more stable policy environment, which has supported the dollar index and put downward pressure on gold and silver prices. This is the primary impact of the trade deals on the market as reflected in the dollar index movement. Q. With the Fed's upcoming policy decision and the August 1st US tariff deadline, what is the near-term outlook for precious metals? Could we see a sharp reversal? Anindya Banerjee: Since the crash in April and the unfolding of the Trump tariff drama, the market's expectation for Fed rate cuts has changed significantly. In April, market participants anticipated a reduction of 75 to 100 basis points, but that has now been revised to just a 25-basis-point cut by year-end. This change has supported the dollar index. In the current meeting, no rate cut is expected for July, though pressure may build on the Fed from August onward, particularly as the Trump administration continues to push for more aggressive cuts. However, given the high fiscal deficit and robust asset markets across various asset classes—even with looming tariff-induced inflation, it appears unlikely for the Fed to initiate significant cuts gold, currently in a sideways correction since September, the price range is roughly $3,250 to $3,450 per ounce. On MCX, a key support level is around ₹97,000–₹97,300. Should this support break, gold prices could fall toward $3,250 (or approximately ₹95,000 on MCX). Positional traders should be patient and ready for potential erosion in price toward the lower bound. Silver, meanwhile, might outperform gold in this environment, partly due to its alignment with a strong base metals market.Q. With the dollar index rebounding from three-week lows and showing high volatility, do you expect further strength? How might that affect gold prices and emerging market currencies like the rupee? ADVERTISEMENT Anindya Banerjee: The US dollar index looks poised for a significant rebound, potentially pushing above 102. The decline of earlier expectations that the Fed would implement significant rate cuts, which once drove the dollar index down from nearly 109 to 97, has now reversed. Moreover, the market currently exhibits heavy short positions, suggesting the potential for a short squeeze if a triggering event occurs. Under these conditions, unless a major global risk-off episode further accelerates the dollar's strength, we expect the index to remain largely sideways. This environment supports the notion of a sideways correction in gold prices.Q. The rupee has been weak lately, partly due to a domestic equity sell-off and stalled US-India trade talks. What is your view on the USD-INR for the coming week, especially in light of Fed policy risks? Anindya Banerjee: The uncertainty around trade negotiations between India and the US is weighing on the rupee, compounded by limited capital inflows. While there have been some debt inflows, equity markets are still facing outflows, and FDI figures have declined. Furthermore, the RBI's intervention by buying dollars helps support the lower side of the rupee. Presently, the technical range for the rupee is about 85–87 per USD. A breakout above 87 would be significant and could trigger an all-time high above 88. However, given that a trade deal with the US appears likely—reinforced by additional agreements such as the recent India-UK FTA, the rupee may find further support, keeping it within the current range. ADVERTISEMENT Q. There is significant tension between Thailand and Cambodia right now, along with other unresolved global trade issues. Could geopolitical concerns lend new support to gold and silver despite the recent corrections? Anindya Banerjee: Geopolitical tensions could impact gold and silver prices, but only if they reach a significant magnitude, similar to conflicts involving Israel and Iran or Ukraine and Russia. In the case of Cambodia and Thailand, while the situation is unfortunate, it does not currently have a global impact strong enough to influence bullion prices significantly. Moreover, even when geopolitics play a role, such impacts tend to be short-lived, lasting one to two days before fading. ADVERTISEMENT Q. What can we expect this week for bullion and other commodities? Anindya Banerjee: For bullion, silver appears attractive at its current levels (around ₹1,13,000–₹1,14,000) as medium-term players might consider accumulating longs. Gold should be viewed as a buy on dips, provided buyers are prepared for potential price drops to around ₹95,000 on MCX if key support breaks. On the broader commodity front, copper and aluminum seem promising, while oil is expected to remain range bound. Disclaimer: Recommendations, suggestions, views and opinions given by the experts/brokerages do not represent the views of Economic Times. (You can now subscribe to our ETMarkets WhatsApp channel)
Time of India
30-07-2025
- Business
- Time of India
Buy the dip in gold? Rupee range & Fed impact explained
Silver may outperform gold, supported by strong base metal fundamentals,' says Anindya Banerjee, Senior VP & Head of Research – Currency, Commodity & Interest Rate at Kotak Securities. He breaks down what's driving the correction in gold and silver, the rebound in the dollar index, and the outlook for USD-INR. Excerpts: On Gold and Silver Correction Q. Last week, both metals experienced heavy profit taking. How much of this correction can be attributed to the rebound in the dollar index and the US-Japan trade development? Anindya Banerjee: The relationship between bullion and the dollar index is strong. In addition, interest rate expectations from the Federal Reserve play an important role. Regarding the trade deals, the US recently signed important agreements with Japan and the European Union, and there has been a 90-day extension in the de-escalation between China and the US. These developments create a more stable policy environment, which has supported the dollar index and put downward pressure on gold and silver prices. This is the primary impact of the trade deals on the market as reflected in the dollar index movement. Near-Term Outlook for Precious Metals Q. With the Fed's upcoming policy decision and the August 1st US tariff deadline, what is the near-term outlook for precious metals? Could we see a sharp reversal? Anindya Banerjee: Since the crash in April and the unfolding of the Trump tariff drama, the market's expectation for Fed rate cuts has changed significantly. In April, market participants anticipated a reduction of 75 to 100 basis points, but that has now been revised to just a 25-basis-point cut by year-end. This change has supported the dollar index. In the current meeting, no rate cut is expected for July, though pressure may build on the Fed from August onward, particularly as the Trump administration continues to push for more aggressive cuts. However, given the high fiscal deficit and robust asset markets across various asset classes—even with looming tariff-induced inflation, it appears unlikely for the Fed to initiate significant cuts soon. For gold, currently in a sideways correction since September, the price range is roughly $3,250 to $3,450 per ounce. On MCX, a key support level is around ₹97,000–₹97,300. Should this support break, gold prices could fall toward $3,250 (or approximately ₹95,000 on MCX). Positional traders should be patient and ready for potential erosion in price toward the lower bound. Silver, meanwhile, might outperform gold in this environment, partly due to its alignment with a strong base metals market. Live Events Impact of the Dollar Index and Emerging Market Currencies Q. With the dollar index rebounding from three-week lows and showing high volatility, do you expect further strength? How might that affect gold prices and emerging market currencies like the rupee? Anindya Banerjee: The US dollar index looks poised for a significant rebound, potentially pushing above 102. The decline of earlier expectations that the Fed would implement significant rate cuts, which once drove the dollar index down from nearly 109 to 97, has now reversed. Moreover, the market currently exhibits heavy short positions, suggesting the potential for a short squeeze if a triggering event occurs. Under these conditions, unless a major global risk-off episode further accelerates the dollar's strength, we expect the index to remain largely sideways. This environment supports the notion of a sideways correction in gold prices. USD-INR and Trade Developments Q. The rupee has been weak lately, partly due to a domestic equity sell-off and stalled US-India trade talks. What is your view on the USD-INR for the coming week, especially in light of Fed policy risks? Anindya Banerjee: The uncertainty around trade negotiations between India and the US is weighing on the rupee, compounded by limited capital inflows. While there have been some debt inflows, equity markets are still facing outflows, and FDI figures have declined. Furthermore, the RBI's intervention by buying dollars helps support the lower side of the rupee. Presently, the technical range for the rupee is about 85–87 per USD. A breakout above 87 would be significant and could trigger an all-time high above 88. However, given that a trade deal with the US appears likely—reinforced by additional agreements such as the recent India-UK FTA, the rupee may find further support, keeping it within the current range. Geopolitical Concerns and Commodity Markets Q. There is significant tension between Thailand and Cambodia right now, along with other unresolved global trade issues. Could geopolitical concerns lend new support to gold and silver despite the recent corrections? Anindya Banerjee: Geopolitical tensions could impact gold and silver prices, but only if they reach a significant magnitude, similar to conflicts involving Israel and Iran or Ukraine and Russia. In the case of Cambodia and Thailand, while the situation is unfortunate, it does not currently have a global impact strong enough to influence bullion prices significantly. Moreover, even when geopolitics play a role, such impacts tend to be short-lived, lasting one to two days before fading. Broader Commodity Trends Q. What can we expect this week for bullion and other commodities? Anindya Banerjee: For bullion, silver appears attractive at its current levels (around ₹1,13,000–₹1,14,000) as medium-term players might consider accumulating longs. Gold should be viewed as a buy on dips, provided buyers are prepared for potential price drops to around ₹95,000 on MCX if key support breaks. On the broader commodity front, copper and aluminum seem promising, while oil is expected to remain range bound.
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Business Standard
09-07-2025
- Business
- Business Standard
Rupee recoups early losses to close stronger; ends higher at 85.68/$
Indian Rupee pared early losses on Wednesday to closes slightly higher after US President Donald Trump reiterated the 10 per cent additional tariff on Brics countries, which India is a part of. The domestic currency closed 2 paise higher at 85.68 against the dollar on Wednesday, according to Bloomberg. The rupee has depreciated by 0.27 per cent against the greenback in the current financial year, and has witnessed 0.08 per cent depreciation in the current calendar year. A vigilance is warranted as the US Dollar Index strengthens and long-term US and Japanese bond yields surge, potentially sparking risk-off sentiment in global markets, according to Anindya Banerjee, head of currency and commodity, Kotak Securities. "We anticipate dollar-rupee to trade within a 85.50–86.50 range on the spot market, with an upward bias." Donald Trump said he would not offer extensions on country-specific levies, which will be effective in August. He slapped a 50 per cent levy on imports of copper, sending the commodity futures to their largest intraday gain in many decades. Drug companies could face a tax as high as 200 per cent. Even as he reiterated that a deal with India is close, US President Donald Trump said the South Asian country will face an additional 10 per cent levy for its participation in Brics. The rupee gained on Tuesday on expectations of an announcement of the US-India mini trade deal, but no such update came through overnight, according to Anil Kumar Bhansali, head of treasury and executive director at Finrex Treasury Advisors LLP. The dollar index gained on the tariff announcement. The measure of the greenback against a basket of six major currencies was up 0.5 per cent at 97.56. Most Asian currencies traded lower, while equity markets across the region posted mixed trends. Investors eye the FOMC Minutes, API crude oil stock change, and consumer credit change from the US, as well as inflation data from China.
