Latest news with #dollarDemand
Reuters
04-06-2025
- Business
- Reuters
Rupee to drop on potential equity outflows, test key support
MUMBAI, June 4 (Reuters) - The Indian rupee is likely to open weaker on Wednesday, weighed down by equity outflows and corporate dollar demand for hedging and payment needs. The 1-month non-deliverable forward indicated an open in the 85.66-85.68 range, versus 85.59 in the previous session. The Indian rupee has been mostly on the back foot in recent sessions, with bankers pointing to sustained dollar demand for immediate payments, muted equity flows, and hedging activity during dollar dips. Foreign investors pulled over $300 million from Indian equities on Tuesday, according to preliminary data, adding to the more than $1 billion in outflows over the prior three sessions. "The price action hasn't been too encouraging lately (for the rupee)," a currency trader at a bank said. "Two things stand out — the rupee appears to be charting its own course, rather than following the broader Asia trend, and the underlying dollar demand remains heavy." Near-term support for the rupee is seen in the 85.60–85.70 range, an area that has attracted buyers in recent days. "The next key level to watch is 86 — a break above could prompt another wave of dollar buying," a treasury official at a bank said. Asian currencies were mixed on Wednesday, mirroring the previous session's tone. The dollar index was slightly lower after Tuesday's advance, with markets focused on the upcoming U.S. jobs report for May and developments in President Donald Trump's tariff negotiations with major trading partners, including China. The question marks around whether Trump and China President Xi Jinping will pick up the phone and have a conversation are an important driver of markets, MUFG Bank said in a note. That said, the market's sensitivity to tariff headlines appears to have waned. Intraday volatility in Asian currencies has come off. KEY INDICATORS: ** One-month non-deliverable rupee forward at 85.76; onshore one-month forward premium at 11.75 paisa ** Dollar index up at 99.22 ** Brent crude futures down 0.3% at $65.5 per barrel ** Ten-year U.S. note yield at 4.45% ** As per NSDL data, foreign investors sold a net $246.4mln worth of Indian shares on June 2 ** NSDL data shows foreign investors bought a net $53.2mln worth of Indian bonds on June 2
Reuters
27-05-2025
- Business
- Reuters
Rupee slips on month-end importer dollar bids, weak equities
MUMBAI, May 27 (Reuters) - The Indian rupee weakened modestly on Tuesday, weighed down by month-end dollar demand from local companies and foreign banks, likely on behalf of custodial clients, while a fall in equities also dented sentiment. The rupee was down 0.2% at 85.27 as of 10:30 a.m. IST. India's benchmark equity indexes fell about 0.6% in early trading, tracking losses in Asian stocks with MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS), opens new tab slightly in the red. Importers have been covering dollar liabilities regularly as there is some concern that a modest reversal in the dollar's trajectory could push the rupee towards 86, a trader at a Mumbai-based bank said. The dollar-rupee daily fix, meanwhile, was quoting at a slight discount, the trader said, signalling heightened appetite to sell dollars at the daily reference rate published by the country's central bank. Asian currencies were mixed with the offshore Chinese yuan down 0.1% at 7.1839 while the Korean won rose 0.2%. The dollar index was a tad higher at 99.1. Persistent weakness in the dollar - to the tune of about 9% against major peers over 2025 so far - has been a tailwind for emerging market currencies across the board. Worries over U.S. trade policies and fiscal health have dented investor appetite for U.S. assets with analysts pointing out a broad pickup in hedging against dollar weakness. While the rupee has underperformed its regional peers over May, traders reckon that the currency should hold a slight upward bias in the near term. "We see USD/INR trading in the 84-86 range in the near term as markets await the India-U.S. trade deal," Kotak Mahindra Bank said in a note.
Reuters
14-05-2025
- Business
- Reuters
Rupee choppy as client flows, weaker yuan counter dollar weakness
MUMBAI, May 14 (Reuters) - The Indian rupee struggled for direction on Wednesday, as comfort from a broadly weaker dollar and modest inflows proved transient in the face of strong demand for the greenback from state-run banks and weakness in the Chinese yuan. The rupee rose to a peak of 85.07 per U.S. dollar in early trading but quickly shed gains to drop to a low of 85.51 before reversing course yet again to quote up by 0.1% at 85.2325 as of 10:50 a.m. IST. Traders said the rupee was bogged down by dollar demand from state-run and foreign banks as well as the yuan's retreat from a six-month peak to a 0.2% drop to 7.21. There were "decent inflows in the morning, but their impact barely lasted in the face of strong dollar bids," including from a large state-run bank, a foreign exchange trader at a Mumbai-based bank said. The dollar index was hovering just shy of the 101 mark, after falling 0.8% in the previous session as U.S. consumer prices rose less than market expectations. Meanwhile, India's consumer prices also increased less than expected at 3.16%, bolstering expectations that the Reserve Bank of India cut interest rates in June. The inflation print "implies room for the RBI to continue its policy easing. Meanwhile, markets may have taken off some geopolitical risk premium on the rupee following the ceasefire with Pakistan, with rupee volatility easing," MUFG Bank said in a note. The rupee's 1-month implied volatility , a gauge of future expectations, was hovering near 5%, well off the peak of above 7% hit last week. Dollar-rupee forward premiums were lower on the day, though, with the 1-year implied yield down 5 basis points at 2.10%, weighed down by an uptick in U.S. bond yields.
