India Forex - Forex Trading in India

India Friday 16 July 2010: The rupee rose for a second day as the euro headed for a third weekly advance, spurring optimism the economic impact of Europe’s debt crisis will be contained and investors will return to emerging markets.

The rupee climbed as exchange data showed foreign holdings of local stocks and bonds touched all-time highs of $81 billion and $14.95 billion, respectively, this week. The euro extended gains this month against the dollar to 4.7% after reports last week showed Germany’s factory output increased 2.6% in May, more than twice the pace economists had estimated.

“The rupee is tracking the strength of other currencies against the dollar, particularly the euro,” said Sudarshan Bhatt, chief currency trader at state-owned Corporation Bank. “We can expect some modest appreciation in the short term.” The rupee strengthened 0.2% to 46.61 per dollar. It is the worst performer this month among Asian currencies, with a 0.3% loss. The currency may rise as high as 46.20 in the coming days, Mr Bhatt predicted.

Offshore forward contracts indicated the rupee will trade at 47.14 to the dollar in three months, compared with expectations for a rate of 47.26 on Wednesday. Forwards are agreements to buy or sell assets at a set price and date. Non-deliverable contracts are settled in dollars.

The rupee declined earlier on speculation importers increased purchases of dollars to pay for oil.

“The rupee opened weaker because dollar demand is stronger in the local market as well as in offshore forwards,” said Jaiprakash Israni, a currency trader in Mumbai at Andhra Bank. “Importers are buying dollars.”

India on Thursday adopted a graphic symbol for the rupee, joining the US, the UK, Europe and Japan, in a bid to project its currency as an icon of the economy’s growing importance in the world. Shorter-tenure swap rates edged up amid tight liquidity conditions while the benchmark 10-year bond yield reversed early direction to end marginally higher ahead of the $2.8 billion auction on Friday. The benchmark 10-year bond yield closed up 1 basis point at 7.64%. Volumes were moderate at Rs 8,915 crore ($1.9 billion) on the central bank’s electronic trading platform. “Bond yields opened slightly lower, but in fact the open was poor considering US yields were lower,” said Anoop Verma, an associate VP at Development Credit Bank in Mumbai.

India Friday 16 July 2010: The Indian rupee fell on Friday as importers bought dollars and largely steady domestic shares provided little direction, traders said.

* At 9:25 a.m., the partially convertible rupee was at 46.70/71 per dollar, weaker than Thursday’s closing of 46.60/61.

* The dollar weakened to near 2-1/2-month lows against a basket on currencies on Friday, with the euro’s outlook positive after a short-covering rally lifted it through key resistance levels.

* Indian shares were trading barely changed early on Friday, while Tata Consultancy Services rallied after the top outsourcer beat forecast and said it was seeing strong demand.

India Friday 4 June 2010 : The rupee today firmed up by four paise to 46.65 against US Dollar in the opening trade, as against its previous close of 46.69, on sustained sell-off of the greenback by exporters and others, traders at the Interbank Foreign Exchange (FOREX) said.
It had rallied by 30 paise yesterday. Though it inched up by four paise only, it could maintain its northward movement for the third day today, dealers said.

It has soared by 51 paise in last three days. The local unit later moved in a narrow range between 46.68 and 46.62 in the intra day.

The movement of the rupee was restricted due to the see-saw trend in equity market, they added.

India Monday 31 May 2010 : The rupee today eased by 11 paise to 46.50 against US Dollar in the early trade, as against is previous close of 46.39 per USD, following sustained demand for the greenback from exporters and others, traders at the Interbank Foreign Exchange (FOREX) said here.
In the last two days, it had risen with a massive gain of Rs 1.30 paise.

The local unit was moving in a wide range between 46.52 and 46.42 per USD in the intra day.

With the equity market opening on a flat note after a three-day rally, no improvement was seen in the rupee, traders added.

India Friday 28 May 2010 : The rupee today surged by 59 paise to 46.70 against US Dollar in the opening trade, as against its previous close of 47.29 per USD, on firm opening of the domestic equity market besides the greenback’s weakness against other Asian currencies, traders at the Interbank Foreign Exchange (FOREX) said here.

The domestic currency had ended at 47.29 per USD, with a gain of 40 paise, on Wednesday. The market was closed yesterday for Buddha Purnima.

The rupee rallied today following strong opening of the stock markets due to the capital inflows from foreign funds and the sell- off of the US currency by exporters and banks, they added.

The local unit was moving in a narrow range between 46.75 and 46.71 per USD in the intra day.

India Thursday 27 May 2010 - The rupee strengthened the most in more than two weeks, snapping a five-day slide, as a regional stock rally spurred risk-taking and exporters took advantage of recent weakness to repatriate income.

The currency rebounded from near an eight-month low and the Sensex climbed from its lowest close since February. Benchmark stock indexes advanced across the region and the MSCI Asia Pacific Index rose 0.9%, trimming this month’s slide to 13%.

“The rupee has recovered from Tuesday’s lows as stocks are showing a positive trend,” said Naveen Raghuvanshi, a currency trader at Development Credit Bank in Mumbai. “Exporters started converting their dollars on Tuesday and may continue to do so on Wednesday.”

The rupee appreciated 0.9% to 47.31 per dollar, paring this month’s loss to 6.4%. The currency hit a seventh-month low of 47.745 on Tuesday.

Offshore forwards signalled traders pared bets for the rupee to weaken. The contracts indicated the currency will drop to 47.67 per dollar in three months, compared with expectations of 48.22 on Tuesday. Forwards are agreements in which assets are bought and sold at current prices for future delivery. Non-deliverable contracts are settled in dollars rather than the local currency.

The rupee’s one-month implied volatility, a measure of expectations for swings in the exchange rate, declined to 13.7% from 18% on Tuesday, which was the highest level since February 2009. The gauge of expected currency swings is quoted by traders as part of option prices.

India Wednesday 26 May 2010 : The Rupee today recovered by 36 paise to 47.34 against US Dollar in the opening session from its last close of 47.70 per USD, on capital inflows by foreign funds and the weak Dollar against other Asian currencies, traders at the Interbank Foreign Exchange (FOREX) said here.
The local unit had slid by 70 paise at 47.70/71 yesterday as it was the weakest level since October 1, 2009, a dealer said.

A narrow fluctuation was seen in the local unit as it recorded the intra day’s high and low at 47.39 and 47.33 per USD respectively.

The Rupee bounced back against the US currency on fresh capital inflows by foreign funds into equities and the dollar selling by exporters, he added.

India Tuesday 25 May 2010 : The rupee today depreciated to nearly a six- month-low by 74 paise to 46.25 against US Dollar in the opening session, as traders braced for more equity outflows in the wake of diminishing global risk appetite, traders at the Interbank Foreign Exchange (FOREX) said here.

It had ended at 46.99 yesterday. The rupee drifted lower today because of the negative opening of equity market, falling by more than 1.5 per cent, tracking Asian markets which dropped on concerns over Europe’s debt woes, traders added.

The local unit later oscillated in a wide range between 46.33 and 46.18 per USD in the intra day.

India Wednesday 19 May 2010: The Indian rupee fell to its lowest level since early March on Wednesday as traders covered short-dollar positions, tracking the euro’s drop and rising risk aversion globally that pushed down local shares. At 10:10 a.m. (0440 GMT), the partially convertible rupee was at 45.97/98 per dollar after hitting 46.01, its weakest since March 2 and below Tuesday’s close of 45.60/61.

At the day’s low, the rupee was down 0.9 percent on the day. “There is not so much of outflows but a lot of dollar short-covering happening,” said Ashtosh Raina, head of foreign exchange trading at HDFC Bank. “There is some dollar selling around these levels but not likely to sustain,” he added.

The euro fell to its lowest in more than four years against the dollar on Wednesday as a sell-off in the single currency picked up pace after Germany’s move to ban naked short-selling of some securities rattled investors. Indian shares fell more than 1 percent, with financials leading the decline, as world stocks dropped on risk aversion after Germany sharpened financial regulation.

Foreign fund moves into and out of the sharemarket are a key factor for the rupee. Foreigners have so far this month pulled out nearly $770 million from stocks, bringing down net inflows this year to $5.7 billion. Last year record inflows of $17.5 billion had helped the rupee rise 4.7 percent.

Dealers said they expected exporters to step in sporadically to sell dollars, limiting a sharp fall in the local unit. The central bank can intervene through state-run banks to prevent a steep fall in the rupee, but that possibility was unlikely, traders said.

“I don’t think the central bank will come in today. There is no reason that they should, the rupee’s move is in line with global dollar moves,” a senior dealer with a private bank said. “There should be cap on the dollar-rupee around 46.25 levels, but it should initially hold in a range of 45.90-46.10.” One-month offshore non-deliverable forward contracts were quoted at 46.13, weaker than the onshore spot rate.

In the currency futures market, the most traded near-month dollar-rupee contracts on the National Stock Exchange and MCX-SX were both at 45.9925 with the total traded volume on the two exchanges at about $1.4 billion.

India Tuesday 18 May 2010: The Indian Rupee is likely to appreciate by a massive 6.3 per cent over the next 10-months despite the Reserve Bank’s likely intervention to stem the rally of local currency against the greenback, Financial services major, ING today said.

The Rupee is likely to rise to 42.75 against US Dollar by the end of this fiscal and may stay around 45/dollar over the next three months, according to ING.

The Rupee has appreciated over three per cent in the current financial year on the back of strong inward capital flows. So far in 2010, FIIs have invested over USD 6-billion in the domestic equity market.