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Business Standard
3 days ago
- Business
- Business Standard
Indian Rupee extends decline to second day; ends slightly lower at 85.36/$
Indian Rupee pared early losses to close slightly weaker on Wednesday, extending its decline to a second day as a revival in the dollar weighed on sentiments. The domestic currency ended 2 paise weaker at 85.36 against the US dollar, after ending at 85.34 on Tuesday, according to Bloomberg. The local unit opened 29 paise weaker at 85.63 against the US dollar against the greenback. The currency has depreciated about 1.2 per cent in the month so far, after two straight months of gains. The US consumer confidence rebounded sharply in May from a near five-year low, driving global investors into dollar-denominated assets. The dollar index, which measures the greenback against a basket of six major currencies, was up 0.01 per cent at 99.53. Further, the index is down over 8 per cent so far this year on US trade policy uncertainty and fiscal worries. However, long-term dollar weakness driven by rising fiscal deficit concerns, policy instability, rising uncertainty, and weak economic conditions is going to support the emerging markets, including the rupee, analysts said. Meanwhile, participants will also eye India's upcoming industrial and manufacturing production data. Strong surprise data could offer further support to the rupee, but a miss could cause downside risks, according to Amit Pabari, managing director at CR Forex Advisors. According to reports, the currency also faced month-end dollar demand from importers, dragging the rupee lower. Weak equity markets, muted foreign inflows, and a rebound in crude oil prices were adding pressure to the currency, Pabari said. Meanwhile, Indian equity indices ended Wednesday's choppy session in negative territory. The 30-share Sensex closed down by 239.31 points or 0.29 per cent at 81,312.32. The rupee's movement this week will be primarily influenced by foreign fund flows into secondary markets, with several key economic indicators on the horizon, including the US Federal Reserve meeting minutes, first-quarter GDP data, and the Core Personal Consumption Expenditures (PCE) Price Index, according to Jateen Trivedi, VP Research Analyst - commodity and currency at LKP Securities. "In the short term, the rupee is likely to trade within a range of 84.80 to 85.75." In commodities, crude oil prices advanced ahead of the OPEC+ committee meeting. Brent crude price was up 0.66 per cent to $64.51 per barrel, while WTI crude prices were 0.74 per cent higher at 61.34, as of 3:45 PM IST.
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Business Standard
4 days ago
- Business
- Business Standard
Rupee extends fall as dollar revives; opens 29 paise weaker at 85.63/$
Indian Rupee extended its losses for the second day on Wednesday as the dollar index staged a recovery, after better-than-expected US consumer confidence data. The domestic currency opened 29 paise weaker at 85.63 against the US dollar, after ending at 85.34 on Tuesday, according to Bloomberg. The currency has depreciated by 1.4 per cent in the month so far, after two straight months of gains. Indian rupee fell yesterday before regaining composure and closing at 85.33 as exporters lined up orders to sell their receivables, which are within the costing, according to Anil Kumar Bhansali, head of treasury and executive director at Finrex Treasury Advisors LLP. Exporters should consider selling around the 85.50–85.60 level to hedge their receivables, Bhansali said. "Importers, on the other hand, may wait for the rate to fall below 85.00 before buying dollars for near-term hedging purposes." Track LIVE Stock Market Updates Here In cues for the day, all eyes will be on India's upcoming industrial and manufacturing production data. Strong surprise data could offer further support to the rupee, but a miss could cause downside risks, according to Amit Pabari, managing director at CR Forex Advisors. Weak equity markets, muted foreign inflows, and a rebound in crude oil prices were adding pressure to the currency, Pabari said. Meanwhile, the rise in the dollar was driven by Japan's potential cut in bond issuance, which triggered a spike in US Treasury yields. Further, the US consumer confidence rebounded sharply in May from a near five-year low, driving global investors into dollar-denominated assets. The dollar index, which measures the greenback against a basket of six major currencies, was up 0.27 per cent at 99.79. Further, the index is down over 8 per cent so far this year on US trade policy uncertainty and fiscal worries. However, long-term dollar weakness driven by rising fiscal deficit concerns, policy instability, rising uncertainty, and weak economic conditions is going to support the emerging markets, including the rupee, Pabari noted. In commodities, crude oil prices advanced ahead of an OPEC+ committee meeting. Brent crude price was up 0.62 per cent to $64.49 per barrel, while WTI crude prices were 0.64 per cent higher at 61.28, as of 9:15 AM IST.
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Business Standard
5 days ago
- Business
- Business Standard
Rupee gains 13 paise, briefly strengthens past 85/$ during session
Indian Rupee extended gains to close higher for the second consecutive session on Monday, amid a broader gain in the Asian currencies on account of a weak dollar. The domestic currency closed 13 paise stronger at 85.09 against the US dollar, after ending at 85.22 on Friday, according to Bloomberg. During the session, the currency rose past the 85 per cent and went as high as 84.82 against the greenback. The domestic unit has weakened by about 0.65 per cent so far this month. Meanwhile, the Korean won, Thai baht, and Indonesian rupiah have gained between 2.5 per cent and 5.5 per cent. The gain in current follows the Reserve Bank of India 's recent surplus transfer of ₹2.69 trillion to the government, which fell short of some market projections ranging up to ₹3 trillion. The RBI dividend represents a substantial and durable infusion of liquidity into the system. However, its impact on system liquidity will become evident only when government expenditure begins to accelerate. The rupee is likely to face strong resistance near 85.50 and 86.10 levels, and every uptick should be used by exporters to increase their hedge ratio, while the immediate support would be 85.00-85.10, Pabari said. The dollar index continued to face pressure after US President Donald Trump extended the deadline for 50 per cent European Union tariffs until July 9. The dollar index, which measures the greenback against a basket of six major currencies, was down 0.1 per cent at 99.01. Foreign Institutional Investors (FIIs) could potentially continue selling due to a narrowing bond yield differential between Indian and US 10-year bonds. Global funds have already pulled out ₹4,000 crore from the Indian bond market last week (excluding Friday), the highest in over a month, compounding rupee pressure. The global environment is turning favourable for Asian currencies, including the Indian rupee, which is benefiting from both capital inflows and dollar weakness, Pabari said.
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Business Standard
23-05-2025
- Business
- Business Standard
Rupee sees steepest rise since Nov. 2022; ends 78 paise stronger at 85.22/$
The Indian rupee witnessed its sharpest single-day appreciation since November 2022 on Friday, buoyed by likely foreign inflows, a weaker US dollar, and softening crude oil prices. The domestic currency closed 78 paise stronger, settling at 85.22 against the US dollar, after ending at 86.00 on Thursday. During the session, it had briefly weakened to 86.04 before staging a 1.03 per cent gain, according to Bloomberg. Earlier in the week, the currency had breached the 86 mark for the first time in over a month. The rupee has depreciated 0.85 per cent so far this month. The Indian Rupee's Real Effective Exchange Rate (REER) eased to 100.8, falling by 0.7 points from 101.5 in the previous month and down sharply from a recent high of 108.14, indicating that the rupee is now approaching a fair valuation, according to Amit Pabari, managing director of CR Forex Advisors. "This correction is expected to boost the export competitiveness of Indian goods, providing support to the currency amid global uncertainties." Attention now shifts to the Reserve Bank of India as the central bank is expected to transfer a surplus between ₹2.2 trillion and ₹3.1 trillion to the government as a dividend for the financial year 2024-25 (FY25). The US House on Thursday passed a sweeping tax bill that adds $3.8 trillion to the US debt over the next decade, worsening fiscal worries. Despite its recent strength, the Dollar Index is showing signs of fatigue as mounting US fiscal concerns weigh on sentiment, Pabari said. The dollar index, which measures the greenback against a basket of six major currencies, was down 0.6 per cent at 99.36. Foreign Institutional Investors (FIIs) could potentially continue selling due to a narrowing bond yield differential between Indian and US 10-year bonds, Pabari said. This narrowing spread – last seen in July 2004 – is turning India less attractive for carry trades, compounding rupee pressure. In commodities, crude oil prices continued to fall amid reports that OPEC+ is discussing a production increase for July. Brent crude price was down 0.20 per cent to $64.31 per barrel, while WTI crude prices were 0.21 per cent lower at 61.07, as of 3:40 PM IST.
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Business Standard
23-05-2025
- Business
- Business Standard
Rupee opens slightly higher at 85.97/$; focus shifts to RBI dividend
The Indian rupee opened stronger on Friday, a day after closing at over a one-month low, amid weaker crude oil prices and the dollar index. The domestic currency began the session 3 paise higher at 85.97 on Friday, after closing at over a month's low of 86.00 on Thursday. The currency is likely to end lower for the third straight week and has fallen 1.8 per cent this month so far, according to Bloomberg data. After holding ground for weeks, the rupee slipped past the critical 86.00 mark, triggered by relentless foreign outflows from equities while importers' stop-losses got triggered, Amit Pabari, managing director of CR Forex Advisors. Global funds sold a net ₹5,045.36 crore from the equity cash market on Thursday, according to NSE data. Foreign Institutional Investors (FIIs) continue their sell-off due to a narrowing bond yield differential between Indian and US 10-year bonds, Pabari said. This narrowing spread – last seen in July 2004 – is turning India less attractive for carry trades, compounding rupee pressure. Meanwhile, attention now shifts to the Reserve Bank of India as the central bank is expected to transfer a surplus between Rs 2.2 trillion and Rs 3.1 trillion to the government as a dividend for the financial year 2024-25 (FY25). "We continue with our call to sell the dollar as India continued to do well on other fundamentals indicated by yesterday's PMI, which came better than expected, particularly the Service PMI, Anil Kumar Bhansali, head of treasury and executive director at Finrex Treasury Advisors LLP, said. "The rupee range for today is between 85.75/86.25 with upticks on dollar to be sold by exporters, while importers are to keep a watch till their level is achieved." The US House on THursday passed a sweeping tax bill that adds $3.8 trillion to the US debt over the next decade, worsening fiscal worries. Despite its recent strength, the Dollar Index is showing signs of fatigue as mounting US fiscal concerns weigh on sentiment, Pabari said. The dollar index, which measures the greenback against a basket of six major currencies, was down 0.33 per cent at 99.63. In commodities, crude oil prices traded lower amid reports that OPEC+ is discussing a production increase for July. Brent crude price was down 0.64 per cent to $64.03 per barrel, while WTI crude prices were 0.69 per cent lower at 60.78, as of 9:30 AM IST.
