Mumbai: The rupee traded in a narrow range and settled on a flat note at 81.92 (provisional) against the US dollar amid rising crude oil prices and foreign fund outflows.
At the interbank foreign exchange market, the local unit opened at 81.95 against the US currency and finally closed at 81.92 (provisional) against the greenback, unchanged from its previous close.
During the session, the rupee touched a high of 81.86 and a low of 81.96 against the dollar. The rupee on Monday settled at 81.92 against the US dollar.
According to Jateen Trivedi, VP Research Analyst at LKP Securities, the rupee traded range bound near 81.90 as the dollar index was in the consolidation range.
“The rupee replicated peers by staying in the range of 81.85-81.95. The US GDP data is the next key trigger for the traders to watch out for, till then the range for the rupee can be seen in 81.75 – 82.10,” Trivedi said.
The dollar index, which gauges the greenback’s strength against a basket of six currencies, rose 0.06 per cent to 101.40.
Global oil benchmark Brent crude futures declined 0.39 per cent to USD 82.41 per barrel.
On the domestic equity market front, the 30-share BSE Sensex advanced 74.61 points or 0.12 per cent to end at 60,130.71 points and the broader NSE Nifty gained 25.85 points or 0.15 per cent to 17,769.25 points.
Foreign institutional investors were net sellers in the capital market on Monday as they offloaded shares worth Rs 412.27 crore, as per exchange data.
Rajkot: Commerce and Industry Minister Piyush Goyal on Saturday expressed hope that traders will soon be able to settle foreign trade in the rupee currency as several banks from different countries are opening special Vostro accounts with Indian banks.
The Reserve Bank of India (RBI) has approved 60 requests to open Special Rupee Vostro Accounts (SRVAs) of correspondent banks from 18 countries, including the UK, Singapore, and New Zealand.
The RBI, he said, is in discussion with the central banks of other countries on the matter. “We will soon start seeing operationalisation of this rupee trading in international trade with several countries,” Goyal told reporters here.
He also said that negotiations for free trade agreements (FTAs) with developed regions like the European Union, the UK, and Canada are in “advanced” stages.
Groups including European Free Trade Association Free Trade Agreement (EFTA), Gulf Cooperation Council (GCC) and Eurasian Economic Union (EAEU) are also keen to start talks for similar pacts with India.
“The whole world wants to have a comprehensive economic partnership agreement with India,” the minister said.
On the second phase of the production-linked incentive scheme for the textiles sector, he said that extensive stakeholder discussions have happened on the subject. “I am quite confident that very soon we will be able to finalise the contours of the scheme and take it up for approval at the highest level,” he added.
Goyal said that Indian textile exporters were earlier facing customs duty disadvantages in developed markets vis-a-vis countries like Bangladesh, but as the government is inking trade pacts with regions like the UAE and Australia, domestic exporters would be able to push shipments.
On promoting sustainability in the textiles sector, Goyal said that the textiles ministry has decided to set up an ESG (environmental, social, and governance commitments) task force.
The task force will come up with suggestions to make the sector more environment-friendly and sustainable.
The textiles ministry has also launched a portal to promote the sale of handicrafts and handloom products.
On the National Textiles Corporation, he said that viability and other issues of its units have been discussed with the Finance Ministry but no final decision has been taken yet.
On pink worms affecting cotton crops in certain places, the minister said that they are in discussion with the agri ministry and scientists to develop pink worm-resistant varieties.
On exports, Goyal said expressed confidence that the USD 100-billion target for the textiles sector would be achieved.
He also said working with industry would help take the industry’s combined domestic and international economic value to USD 250 billion. “It is possible. We will definitely achieve that,” he added.
Goyal was here as part of the Saurashtra Tamil Sangamam which is being conducted under the ‘Ek Bharat Shreshtha Bharat’ Initiative in Gujarat in Rajkot.
New Delhi: The rupee consolidated in a narrow range and settled for the day 1 paise higher at 82.11 against the US dollar on Wednesday, as participants remained on the sidelines ahead of the release of the retail inflation data.
At the interbank foreign exchange market, the local unit opened at 82.08 against the US currency and touched a high of 82.01 during intra-day.
It finally closed at 82.11 against the greenback, registering a gain of 1 paise over its previous close.
On Tuesday, the rupee closed at 82.12 against the US currency.
The dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.51 per cent to 101.69.
Global oil benchmark Brent crude futures advanced 1.53 per cent to USD 86.92 per barrel.
“The Indian rupee tread water along with the dollar index ahead of the crucial inflation data from the US and India. The rupee consolidates in the narrow range with thin volume and volatility even after stronger domestic equities and foreign fund inflows,” said Dilip Parmar, Research Analyst, HDFC Securities.
The market is pricing in for lower inflation readings after last week’s surprise rate pause by RBI.
In the near-term, spot USDINR is expected to trade between 81.70 to 82.50.
According to Anuj Choudhary – Research Analyst at Sharekhan by BNP Paribas the Indian rupee appreciated on Wednesday on positive domestic equities and a weak US dollar. However, a surge in crude oil prices and the IMF slashing India’s GDP forecast capped sharp gains.
The IMF cut India’s GDP forecast for 2023 to 5.9 per cent from 6.1 per cent in its previous estimate amid concerns over global economic uncertainty.
The US dollar fell after US Fed officials flagged recession worries in the US this year due to rising interest rates and a slowdown in lending.
“We expect Indian rupee to trade with a slight negative bias on concerns over monsoon after Skymet forecast below normal rains. Any pickup in US dollar amid rate hike expectations and positive crude oil prices may also weigh on rupee,” Choudhary said.
However, positive domestic markets and fresh FII inflows may support rupee at lower levels.
On the domestic equity market front, the 30-share BSE Sensex advanced 235.05 points or 0.39 per cent to end at 60,392.77 and the broader NSE Nifty gained 90.10 points or 0.51 per cent to 17,812.40.
Foreign Institutional Investors (FIIs) were net buyers in the capital market on Wednesday as they purchased shares worth Rs 1,907.95 crore, according to exchange data.
Forex trading is the buying and selling of various currencies with the aim of making a profit. Since it is one of the most prevalent sorts of trading, it attracts a large number of traders from all over the world. One of the key currencies in the foreign exchange market is the Indian rupee, which is one of the currencies of developing economies and one of the principal currencies traded there. In this essay, we will go through the fundamentals of foreign currency trading, with a focus on the Indian rupee and other major currencies.
Learning about the foreign exchange market
The forex trading market is the world’s most significant and largest financial market. Traders may buy and sell currencies from all around the world on this market, which is open 24 hours a day, five days a week. The market is decentralised, which means that it does not function in a single place. Instead, the transaction is carried out digitally via a consortium of financial institutions that includes banks, brokers, and others.
Trading foreign exchange (forex) is a very active and fast-paced market that is open five days a week, 24 hours a day. This implies that traders may have access to the market at any time of day and from any location on the globe in order to trade currencies. The scale and liquidity of the foreign exchange market make it one of the most actively traded markets in the world, with a daily turnover of more than $5 trillion. Due to the fact that this market’s liquidity enables traders to join and exit positions rapidly and at advantageous prices, the market is appealing to traders who are looking for chances to engage in short-term trading. Traders nonetheless need to maintain a constant awareness of the latest economic and geopolitical news and events, particularly those that have the potential to influence currency markets.
Forex trading using the Indian rupee
The use of the Indian rupee in foreign currency dealing is becoming more popular among dealers worldwide. The Indian rupee is the country’s major currency, and it often trades on the foreign exchange market. There are many techniques to follow when trading foreign currencies using the Indian rupee.
Trading foreign exchange using the Indian rupee is possible using the currency pair USD/INR. The most prevalent and popular currency combination in India is the trade of US dollars for Indian rupees. It entails buying and selling one currency in exchange for another. Another way to trade foreign currency with the Indian rupee is to use the currency pair EUR/INR. Particularly, this covers acquiring and selling the euro in exchange for Indian rupees.
To trade foreign exchange using the Indian rupee, traders must first grasp the factors that determine the currency’s value. These components include the nation’s economic performance, government stability, interest rates, and trade balance. Traders must also keep a careful eye on global events such as geopolitical tensions, economic data releases, and changes in monetary policy since these may all have an impact on the value of the Indian rupee.
Foreign exchange trade with the major currencies
In addition to the Indian rupee, a number of other prominent currencies are traded on the foreign exchange market. These currencies include the US dollar, the euro, the Japanese yen, the British pound, the Swiss franc, the Canadian dollar, and the Australian dollar. Foreign exchange, often known as forex trading, is the act of buying one currency with another in order to make a profit.
To trade forex with other currencies, forex traders must grasp the elements that influence the pricing of other major currencies. These components include the nation’s economic performance, government stability, interest rates, and trade balance. Traders must also keep a careful eye on global events such as geopolitical tensions, economic data releases, and monetary policy changes since all of these factors have the ability to affect the value of these currencies.
Methods for trading in the foreign exchange market
Investors may use a range of trading strategies while trading foreign currency (forex). This category includes strategies such as scalping, day trading, swing trading, and position trading.
Scalping is a trading strategy that tries to produce a series of small profits from a high number of transactions made throughout the day. This strategy requires outstanding analytical ability, lightning-fast reflexes, and quick decision-making.
The activity of buying and selling a currency pair on the same trading day is known as day trading. Traders must have a high degree of self-discipline and attention to be effective with this strategy. This is because they will need to make quick decisions in order to profit from short-term price swings.
Swing trading is a trading strategy that involves holding positions for a prolonged length of time, which may range from several days to a few weeks. Since they must wait for market changes before taking action, traders must be patient and disciplined if they are to succeed with this strategy.
Position trading is a trading approach that requires holding positions for a long period of time, which might be months or even years. To be successful with this strategy, traders must have a long-term perspective and a thorough understanding of the fundamental dynamics that drive currency values.
The procedure for choosing a forex broker
Choosing the finest forex broker to deal with is critical for successful forex trading. A reputable foreign exchange broker will be licensed and regulated by a reputable financial body. They will also offer fair spreads and costs, an easy-to-use trading interface, and excellent customer support.
Before making a selection, traders should consider the broker’s track record and reputation in the industry. Visitors may check ratings and reviews on the website, as well as ask for recommendations from other businesses. Another critical stage in the process is comparing the features and services provided by different brokers, such as trading instruments, leverage, deposit and withdrawal methods, and educational materials.
Conclusion
Forex trading with the Indian rupee and other major currencies may be a successful and thrilling experience for traders with the right knowledge, talents, and temperament to engage in the market. Traders must have a fundamental grasp of the foreign exchange market, a robust trading strategy, a reputable broker, and an acceptable risk management plan. Traders that follow these principles continue to educate themselves and stay adaptable in the face of continuously changing market conditions may find success in foreign currency trading.
Mumbai: The rupee depreciated 11 paise to close at 82.75 against the US currency on Friday, as the strength of the American currency in the overseas market and a muted trend in domestic equities weighed on investor sentiments.
Unabated foreign fund outflow also impacted the market sentiments.
At the interbank foreign exchange market, the rupee opened at 82.67 against the greenback and finally settled for the day at 82.75, registering a fall of 11 paise over its previous close of 82.64.
During the session, the domestic unit witnessed an intra-day high of 82.66 and a low of 82.81 against the American dollar.
According to Gaurang Somaiya, Forex & Bullion Analyst, Motilal Oswal Financial Services, rupee continued to trade in a narrow range and volatility remained low.
“Nearly all Fed policymakers supported the decision to further slow the pace of interest rate hikes,” Somaiya said, adding that focus will be on the core PCE index number and a higher number could extend gains for the dollar.
“We expect the USDINR(Spot) to trade sideways and quote in the range of 82.40 and 83.05,” Somaiya said.
According to Anuj Choudhary, Research Analyst at Sharekhan by BNP Paribas, the Indian rupee depreciated on weak domestic markets and a positive greenback. Rebound in crude oil prices also weighed on rupee.
Dollar strengthened on upbeat labour market data and expectations of a hawkish Federal Reserve. However weak GDP capped sharp upside in dollar. The US economy expanded at 2.7 per cent in Q4 2022 compared to initial estimates of 2.9 per cent and 3.2 per cent in Q3 2022, Choudhary said.
“We expect rupee to trade with a negative bias on expectations that dollar may strengthen further on hawkish Fed and weak domestic markets. FII outflows and renewed geopolitical tensions may also put downside pressure on rupee,” Choudhary added.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.60 per cent higher at 105.23.
Global oil benchmark Brent crude futures were trading 0.66 per cent lower at USD 81.67 per barrel.
The 30-share BSE Sensex ended 141.87 points or 0.24 per cent lower at 59,463.93, while the broader NSE Nifty declined 45.45 points or 0.26 per cent to 17,465.80.
Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Friday as they offloaded shares worth Rs 1,470.34 crore, according to exchange data.
New Delhi: The rupee appreciated 12 paise to close at 82.08 against the US currency on Friday, supported by a rebound in domestic equities and easing crude oil prices.
However, corporate dollar demand and weak macroeconomic data weighed on investor sentiments and restricted the sharp gain in the rupee, forex traders said.
At the interbank foreign exchange market, the local unit opened at 82.15 against the US dollar and finally settled at 82.08, registering a gain of 12 paise over its previous close of 82.20.
During the trading session, the rupee swung between a low of 82.31 and a high of 81.76 against the dollar.
Dilip Parmar, Research Analyst, HDFC Securities said the Indian rupee recovered after touching a three-week low as bargain buying emerged in domestic equities.
The long unwinding in the dollar, and expected intervention along with the weaker crude and dollar index supported the rupee to gain on Friday.
“Next week, the focus will remain on the RBI monetary policy decision after the recent growth-focused budget from the government,” Parmar said, adding that Spot USD/INR has resistance between 82.50 to 82.75 while on the lower side, 81.50 becomes good support.
The dollar index, which gauges the greenback’s strength against a basket of six currencies, declined 0.12 per cent to 101.63.
Global oil benchmark Brent crude futures advanced 0.39 per cent to USD 82.49 per barrel.
“Indian Rupee appreciated on a rebound in domestic equities and weakness in crude oil prices. However, positive US Dollar capped sharp gains,” said Anuj Choudhary – Research Analyst at Sharekhan by BNP Paribas.
Choudhary further noted that the rupee depreciated earlier today as PMI data was disappointing. India’s services PMI fell to 57.2 in January from 58.5 in December, while the composite PMI fell to 57.5 from 59.4 during the same period.
“We expect the rupee to trade with a slight positive bias as a rebound in domestic equities may lead to fresh foreign inflows. Decline in crude oil prices and weak dollar amid dovish Fed may support rupee at lower levels,” Choudhary said.
Market participants may remain cautious ahead of non-farm payrolls and ISM services PMI data from the US. While the payroll data is expected to show a slowdown in the pace of job additions, services PMI is expected to show the sector move to expansion territory, Choudhary added.
On the domestic equity market front, the 30-share BSE Sensex advanced 909.64 points or 1.52 per cent to end at 60,841.88, while the broader NSE Nifty rose 243.65 points or 1.38 per cent to 17,854.05.
Foreign Institutional Investors (FIIs) were net sellers in the capital market on Thursday as they offloaded shares worth Rs 932.44 crore, according to exchange data.
Karachi: The Pakistani rupee resumed its downwards slide on Thursday after two modest sessions as the “optimism surrounding the government and IMF talks scaled back”, local media reported.
The Pakistani rupee depreciated by Rs 2.52 to settle at Rs 271.35 at the close of the day. However, the local currency touched 272.17 against the dollar during intra-day trade, Geo News reported.
The rupee had closed at Rs 268.83 on Wednesday.
Since the start of this year, the rupee has depreciated by 44.92, Geo News reported.
Capital market expert Saad Ali said that reports regarding the rejection of the circular debt management plan (CDMP) presented by the government to the International Monetary Fund (IMF) had dented the market’s confidence.
Ali said that these reports created doubts about the possibility of a bottleneck in the ongoing government-IMF talks, Geo News reported.
An IMF mission is currently in Pakistan holding talks on the ninth review that will continue till February 9 after which a staff-level agreement is expected between the two sides.
The IMF has rejected the CDMP presented by the government and asked the authorities to raise the electricity tariff by Rs 12.50 per unit in order to restrict the additional subsidy at Rs 335 billion for the current fiscal year.
During the second day of technical-level talks, the Washington-based lender termed the revised CDMP as “unrealistic”, which is based on certain wrong assumptions. So the government will have to bring more changes in its policy prescription to restrict the losses of the cash-bleeding power sector.
The IMF and the Finance Ministry will work out a gap on the fiscal front after which different additional taxation measures will be finalised through the upcoming mini-budget.
The revised CDMP envisages an increase in the monster of circular debt to the tune of Rs 952 billion for the current fiscal year against an earlier projection of Rs 1,526 billion, Geo News reported.
Karachi: Following the rupee’s devaluation in the open and interbank markets, the benchmark index of the Pakistan Stock Exchange (PSX) rallied and gained by more than 1,000 points, as per media reports.
Commenting on the development, Arif Habib Limited’s Head of Research, Tahir Abbas, said that the rupee’s steep fall has triggered a positive sentiment in the market, Geo News reported.
“The driving factor behind the market is the rupee’s market-based exchange rate. This has helped clear the uncertainty that was surrounding the investors,” Abbas said.
The analyst said that the government’s steps are helping the market recover and increasing the confidence of the investors – who were in a difficult position due to the uncertainty over the revival of the International Monetary Fund’s (IMF) programme.
Abbas added that with a mini-budget expected within the next eight to 10 days, the tariffs of gas and electricity might also witness an increase and more taxes might be be imposed – also the global money lender’s conditions.
The Pak rupee posted its biggest single-day decline against the dollar in more than two decades, after rapidly depleting foreign exchange reserves and an unyielding IMF forcing the government to relax its grip on the currency, The News reported.
Following the government’s decision to end its control over the rupee-dollar exchange rate as part of the IMF condition, the Pak currency slid 9.61 per cent, or Rs 24.5, to a record low of Rs 255.43 against the US dollar compared to Wednesday’s close of Rs 230.89.
The over 9 per cent decline was its highest since October 30, 1999, when the currency had slumped 9.4 per cent.
“The State Bank of Pakistan is seemingly adjusting the exchange rate to the market rate – closer to open market to address the widening difference between the official and open market rate and to curb the flow of dollars through the informal market,” said Saad Ali, a capital market expert, The News reported.
