Continuing its losing streak for the third straight session, the rupee depreciated 18 paise against the US dollar on Wednesday, September 8, to settle at 73.60 (provisional), tracking a stronger American currency and muted trend in domestic equities. At the interbank foreign exchange market, the domestic unit opened at 73.48 and dropped to a low of 73.70 during the trading session.
In an early trade session, the domestic currency slipped 13 paise to 73.55 against the greenback. The local unit closed at 73.60 against the dollar, down 18 paise against its previous close. Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.23 per cent higher at 92.72.
Mr Amit Pabari, MD, CR Forex:
”Globally, a rise in treasury yields to a seven-week high of 1.385 per cent amid concerns over the spread of delta variant and its impact on global economic recovery caused the dollar to rebound near 92.50 levels despite weaker than expected jobs data. Traders now await jobless claims data on Thursday and producer prices on Friday for a further update on the US economic recovery.
Domestically, after gaining almost two per cent across August over the start of September, the rally for an appreciation in rupee seems to be fading. In the past session rupee traded at 73.40 after touching 72.90 last week amid FII outflows, panic importer buying, and RBI intervention. In addition, the rising fears of the third wave could lead to localized lockdowns and hurt rupee hereon. Looking ahead, for USDINR pair 73.50-60 remains a crucial resistance to determine the way forward for the rupee.”
Anindya Banerjee, DVP, Currency Derivatives & Interest Rate Derivatives at Kotak Securities:
“The rupee saw a follow through on the way up just ahead of noon fix, as risk-off sentiments prevailed in equity markets on the back of news of a probable default by second-largest property developer in China, Evergrande.
Corporate outflows were noted on the back of dividend payments. However, dollar selling from exporters and FPIs capped the advance and pushed the pair from 73.70 to 73.60 at close of spot. Bias remains of a range between 73.00 and 74 on spot.”
Kshitij Purohit, Lead International & Commodities at CapitalVia Global Research Limited:
”The USD/INR exchange rate opened the day at 73.1250, unchanged from the previous day’s finish. The currency pair is likely to rise slightly this week, owing to a drop in local stocks and a lack of momentum in dollar sales from exporters.
Broad-based purchasing across multiple sectors propelled local equities to new highs, and we can now expect a technical drop this week from the BSE Sensex and Nifty 50’s lifetime highs. During the course of this week, we should expect to see some profit booking.
The rupee is currently trading slightly lower as traders prefer the dollar due to concerns about the global economy’s recovery following the release of weaker-than-expected US jobs data, lowering sentiment for emerging-market assets. After investors postponed expectations of when the US Federal Reserve will begin asset cutting, the dollar index is again trading at its one-month low.
On the domestic front, USD/INR September opened on a flat note and was moving in a strong Bullish trend since morning. The “Symmetrical Triangle” candlestick chart pattern that we discussed in yesterday’s session gave a positive breakout today and that too with sufficient volumes. This gave us an indication that prices may move in a sustainable Bullish trend and the same happened.”
On the domestic equity market front, the BSE Sensex ended 29.22 points or 0.05 per cent lower at 58,250.26, while the broader NSE Nifty slipped 8.60 points or 0.05 per cent to 17,353.50.
Sahaj Agrawal, Head of Research- Derivatives at Kotak Securities:
”September series sentiment remains positive; broader market participation has also picked up marginally. Expect up-move to continue and suggest buying on dips. Trend support is seen at 16760 while near-term support is seen at 17080; on the higher side 17500-17600 can act as resistance while the medium-term target is seen at 18000.
Auto and Energy stocks provide value buying opportunities from the trading perspective; select banking stocks also remain attractive.”
Mr. S Hariharan, Head – Sales Trading, Emkay Global Financial Services:
“There are a number of developed market central bank meetings scheduled this week, which would provide greater insight into plans for tapering of asset purchases, which in turn would have implications for currency markets as well as risk assets. As a result, we have seen a trend of increase in long stock futures positioning by FIIs start to come down over the last three sessions.
Since mid & small cap indices are trading close to resistance levels despite Nifty making new highs, overall market sentiment remains cautious, and the market advance still dominated by a handful of stocks. Cement and PSU indices appear to have highest relative strength while Autos are the weakest sector in the market overall.”
According to exchange data, the foreign institutional investors were net sellers in the capital market on September 7 as they offloaded shares worth Rs 145.45 crore. Brent crude futures, the global oil benchmark, rose 0.80 per cent to $ 72.26 per barrel.