Indian Police Arrest 11 for Crypto Scam Worth $5.4 Million

With crypto scams, hacks, and rugpulls being the norm of the day, crypto crimes have become more prevalent.

Recently, the Indian police arrested 11 people in connection with a fraudulent cryptocurrency scheme that allegedly defrauded close to 2,000 investors out of $5.4 million.

Cryptocurrency Scam Worth $5.4 Million

In the latest crackdown by the Indian police, the authorities came down firmly on a cryptocurrency investment scheme that has duped over 2,000 investors out of $5.4 million (40 crore INR).

As per data from local news agencies, the number of arrests reached 11 around February 22, while close to 7 people were arrested on Sunday in Maharashtra’s Nagpur. 

The main accused in this scam is Nishid Wasnik and his wife Pragati, alongside two other associates, Gajanan Mungune and Sandesh Lanjewar. The four of them were arrested just a day ago in Pune.

Reportedly, Wasnik had even organized a seminar on cryptocurrency investment in Pachmarhi in Madhya Pradesh. 

The alleged scammers went into hiding around March last year and had been on a run until they were arrested this Saturday.

A statement from the police described that Wasnik used to flaunt his luxurious lifestyle to lure people into investing in his firm. The couple convinced people that their firm was dealing in Ethereum (ETH)

That said, officials were quoted as saying:

“He (Wasnik) manipulated the firm’s website to show a steady rise in the value of investments while transferring money into his accounts fraudulently between 2017 and 2021.”

All 11 people have been charged under IPC, Maharashtra Protection of Interest of Depositors Act, and Information Technology Act provisions by Yashodhara Nagar police in Nagpur.

Crypto-crimes Rising

Despite the market volatility, the recent tax imposed on the asset class, and an uncertain legal status, cryptocurrencies continued to fascinate Indian investors.

The number of crypto users and traders has seen a decent rise over the last few months.

Worryingly, however, with an increase in users across the globe, a surge in crypto crimes follows. 

Data from Indian news organizations revealed that in 2021 alone, Indian users visited crypto scam websites over 9.6 million times. That said, over the last couple of years, crimes and scams surrounding the top cryptos like Bitcoin and Ethereum have considerably gone up too. 

India’s CBDC ‘Digital Rupee’ To Be Issued by 2022–2023, Says MoF

As the budget for the fiscal year 2022-2023 was presented today at the Parliament, the government of India announced some headline-making developments, and at the top of it was the pronouncement of the Central Bank Digital Currency of India.

The Digital Rupee

The use of Central Bank Digital Currencies (CBDCs) is still an ongoing discussion and while a few countries around the globe have begun testing or deploying gradually, it hasn’t yet been considered as a replacement for fiat yet.

Instead, it has been seen as an additional alternative for the citizens as the demand for crypto-based projects has been growing. With CBDCs the factor of decentralization does disappear but it opens up the path for possible acceptance of other blockchain-based currencies. 

In line with that sentiment, Nirmala Sitharam, the Minister of Finance and Corporate Affairs, India, today officially announced the issuance of the country’s CBDC – the “Digital Rupee”. She stated:

“Introduction of a Central Bank Digital Currency will give a boost to the Indian economy”

The digital currency will be issued by the Reserve Bank of India (RBI) and the expected date has been given for this fiscal year. Adding on to the same Sitharam iterated:

“Digital currency will also lead to a more efficient and cheaper currency management system. It is therefore proposed to introduce ‘Digital Rupee’ using blockchain and other technologies to be issued by the Reserve Bank of India starting 2022 – 23”

Not only was the CBDC announced but the government also announced a 30% tax on crypto assets-based income. She said:

“Accordingly, for the taxation of virtual digital assets, I propose to provide that any income from transfer of any virtual digital asset shall be taxed at the rate of 30 per cent”

Furthermore, a 1% TDS was also levied on payments over a certain threshold, made using virtual digital assets which will also act as a transaction tracking mechanism.

The CBDC Race

While India is yet to issue the CBDC, there are countries that have already been a step ahead and successfully operating CBDCs. The 9 countries that have already implemented digital currencies include Nigeria and The Bahamas. 

Many other countries are still in the pilot stages including China and South Korea while the likes of Japan and Russia are in the development stages yet.

As of now, only 9 countries have completely adopted CBDCs | Source: Atlantic Council

Thus considering the pace at which CBDCs are being adopted it won’t be any more than 3-4 years before the majority of the countries in the world would have launched their own digital currencies.

GOLD Analysis – Bearish Indicators in Place

Gold remained silent even after the FED’s multiple announcements on rate hikes. Gold price will be on the watch this week during the testimony of FED Chair Jerome Powell.

XAUUSD closed the first week of 2022 with a 1.76% loss compared to its closing price of December 2021 at $1830. Inflation hedge – Gold seems to have a weaker edge over the strengthening US Dollar. Investment volumes of Gold decreased in Q3 2021, whilst in Q3 2020 total Gold bound to Investment was 495t a year after that number decreased to 235t. Gold tied to the investment had a dominating demand in Q3 2020 and has been decreasing since then.

Despite an increased purchases of Gold by global Central Banks in 2021, many CBs parted with their precious metal purchases to withhold the deflation of their local currencies as the US Dollar was gaining momentum by the end of 2021. Thus, Turkey had to sell 35.1 tonnes in 2021 to hold Lira from being depreciated, in 2020 Turkish CB purchased 163.1 tonnes of Gold. Largest Gold purchases in 2021 according to the data from the World Gold Council were made by Brazil 62.3 tonnes, Hungary 63 tonnes, India 73.8 tonnes, Japan 80.8 tonnes, Thailand 90.2 tonnes.

Largest CB increase/decrease in Q3 2021 looks as follows.

Based on this data, it is obvious that these Central Banks are hedging against the hike of the US Dollar Index. Kazakhstan, Uzbekistan and Russia will be more vulnerable during recent days against the US Dollar due to developments in Kazakhstan and these states will probably use their Gold purchases to withhold their currencies from depreciation, following the Turkish CB.

Left to right first row – USD/INR, USD/KZT, USD/UZS

Left to right second row – USD/BRL, USD/RUB, USD/TRY

While rate hike news in late 2020 and mid 2021 were referred to as a bullish signal for gold and bearish for the US Dollar Index, since mid 2021 markets more rely on FED’s redemption of goals, promises and forecasts. Despite some forecasts being flickering, achieving one of the main goals is considered bullish for the US Dollar. Positive economic data during this weeks release and Mr. Powell’s positive outlook on the economic recovery of the United States will ignite the bullish momentum of the DXY.

Daily XAUUSD chart projects a triangle pattern, and signals the retest of the lower edge of the triangle, based on the pattern’s rule.

MACD and RSI also signal a bearish trend continuation of XAUUSD up until the end of this winter.

Moving averages on a daily XAUUSD chart also do not favor the Gold bulls. MA200 and MA50 both are above the closing price of XAUUSD. Remarkably, the 200-day moving average is above the 50-day MA. This formation in technical analysis is referred to as a “Death Cross’ and always is a bearish signal.

There still is a dynamic support which was able to withhold Gold from sliding below $1700, however the lack of impulse and a pressure from the USD could force XAUUSD to break this support and go down to $1724 and $1680 below that.

Commodity Currencies Explained (Part I)

Let’s start by defining what could be called a commodity currency (or commodity pair).

Generally, a commodity currency represents a currency from a country or geographical zone that produces specific commodities which will account for most of its exports.

Some examples of currencies which could be considered as commodity currencies are presented in the following table:

Currencies Top Material Exports
Argentine peso (ARS) Soybean meal ($8.81B), corn ($6.19B), delivery trucks ($3.83B), soybeans ($3.47B), soybean oil ($3.38B), bran ($292M), other vegetable residues and waste ($232M), and ground nut oil ($131M)
Australian dollar (AUD) Iron ore ($67.5B), coal briquettes ($51.5B), petroleum gas ($34.1B), gold ($25.4B), aluminium oxide ($5.6B), sheep and goat meat ($3.07B), and wool ($2.26B)
Brazilian real (BRL) Soybeans ($26.1B), crude petroleum ($24.3B), iron ore ($23B), corn ($7.39B), sulfate chemical wood pulp ($7.35B), poultry meat ($6.55B), frozen bovine meat ($5.67B) and raw sugar ($5.33B)
Canadian dollar (CAD) Crude petroleum ($67.8B), cars ($40.9B), gold ($14.6B), refined Petroleum ($12.3B), vehicle parts ($10.8B), sawn wood ($6.35B), raw aluminium ($5.45B), potassic fertilizers ($5.27B), rapeseed ($3.23B), and rapeseed oil ($2.6B)
Indian rupee (INR) Refined petroleum ($39.2B), diamonds ($22.5B), packaged medicaments ($15.8B), jewellery ($14.1B), cars ($7.15B), Rice ($6.9B), Crustaceans ($4.67B), and Non-Retail Pure Cotton Yarn ($2.86B)
Indonesian rupiah (IDR) Coal briquettes ($20.3B), palm oil ($15.3B), petroleum gas ($8.32B), cars ($4.52B), gold ($4.01B), lignite ($2.91B), stearic acid ($2.76B), uncoated paper ($2.37B), and coconut oil ($1.9B)
Malaysian ringgit (MYR) Integrated circuits ($63B), refined petroleum ($17.8B), petroleum gas ($11.5B), semiconductor devices ($9.65B), palm oil ($8.91B), rubber apparel ($4.37B), other vegetable oils ($1B), copper powder ($873M), asphalt mixtures ($417M), and platinum clad metals ($127M)
Mexican peso (MXN) Cars ($53.1B), computers ($32.4B), vehicle parts ($31.2B), delivery trucks ($26.9B), crude petroleum ($26.6B), tractors ($10.7B), beer ($5.07B), tropical fruits ($3.6B), and railway freight cars ($3.57B)
New Zealand dollar (NZD) Concentrated milk ($5.73B), sheep and goat meat ($2.62B), rough wood ($2.31B), butter ($2.29B), frozen bovine meat ($2.09B), casein ($613M), and honey ($237M)
Nigerian naira (NGN) Crude Petroleum ($46B), petroleum gas ($7.78B), scrap vessels ($2.26B), flexible metal tubing ($2.1B), and cocoa beans ($715M)
Peruvian nuevo sol (PEN) Copper ore ($12.2B), gold ($6.76B), refined petroleum ($2.21B), zinc ore ($1.65B), and refined copper ($1.62B), animal meal and pellets ($1.54B), lead ore ($1.01B), fish oil ($434M), and buckwheat ($139M)
Russian ruble (RUB) Crude petroleum ($123B), refined petroleum ($66.2B), petroleum gas ($26.3B), coal briquettes ($17.6B), wheat ($8.14B), semi-finished iron ($6.99B), coal tar oil ($4.49B), raw nickel ($4.03B), and nitrogenous fertilizers ($3.05B)
South African rand (ZAR) Gold ($16.8B), platinum ($9.62B), cars ($7.61B), iron ore ($6.73B), and coal briquettes ($5.05B), manganese ore ($3.16B), chromium ore ($1.92B), titanium ore ($583M), and niobium, tantalum, vanadium, and zirconium ore ($480M)
Swiss franc (CHF) Gold ($59B), packaged medicaments ($46.2B), blood, antisera, vaccines, toxins, and cultures ($32.9B), base metal watches ($13.6B), jewellery ($10.9B), precious metal watches ($7.32B), and hydrazine or hydroxylamine derivatives ($501M)
US dollar (USD) Refined petroleum ($84.9B), crude petroleum ($61.9B), cars ($56.9B), integrated circuits ($41.4B), vehicle parts ($41.2B), medical instruments ($29.5B), gas turbines ($28.1B), aircraft parts ($16.3B), and orthopedic appliances ($12.1B)
Vietnamese dong (VND) Broadcasting equipment ($42.3B), telephones ($18.2B), integrated circuits ($15.5B), textile footwear ($10.6B), and leather footwear ($6.43B), coconuts, Brazil nuts, and cashews ($3.16B), fuel wood ($2.05B), cement ($1.39B), metal-clad products ($1.37B), and cinnamon ($175M)
West African CFA franc (XOF) Gold ($11.66B), cocoa beans ($3.84B), refined petroleum ($2.64B), rubber ($1.08B), raw cotton ($1.04B), and crude petroleum ($941M), cocoa paste ($795M), other oily seeds ($407M), Phosphoric Acid ($346M), coconuts, Brazil nuts, and cashews ($280M), ground nuts ($192M), zinc ore ($173M), raw zinc ($155M), electricity ($141M), cocoa shells ($115M), calcium phosphates ($95.7M), radioactive chemicals ($59.6M), rough wood ($59.5M), raw copper ($49.4M), Petroleum Gas ($42.5M), non-fillet frozen fish ($356.1M), other vegetable residues ($25.4M), and aluminium ore ($3.17M)

Data: The Observatory of Economic Complexity (OEC)

(Bold: products which the country/economic area was the world’s biggest exporter in 2019)

For active trading purposes, the ones highlighted in yellow would be characterised as freely floating and more liquid currencies. Thus, they would also be more accessible and less costly (with lower fees) to trade.

For hedging purposes, the others would present some advantages to the commercialisation of their associated natural resources, even though they would rather be considered more exotic currencies.

Charts

Here is a representation of some key commodity currencies presented in the above table on a weekly timeframe against the US dollar (reference currency):

Graphical user interface, chart, applicationDescription automatically generated

Each chart was represented within 2-standard deviation Bollinger Bands based on a 20-period simple moving average (in orange), a 50-period simple moving average (blue curve), a 200-period simple moving average (the black curve) and in the pane below is a 14-period relative strength index (in blue) to which was applied a 9-period simple moving average (red curve).

All those charts are displayed over a 2-year historical period.

In the next article I’ll focus on highlighting some correlations which may exist between key natural resources and the currencies in which they are usually traded.

Like what you’ve read? Subscribe for our daily newsletter today, and you’ll get 7 days of FREE access to our premium daily Oil Trading Alerts as well as our other Alerts. Sign up for the free newsletter today!

Thank you.

For a look at all of today’s economic events, check out our economic calendar.

Sebastien Bischeri
Oil & Gas Trading Strategist

* * * * *

The information above represents analyses and opinions of Sebastien Bischeri, & Sunshine Profits’ associates only. As such, it may prove wrong and be subject to change without notice. At the time of writing, we base our opinions and analyses on facts and data sourced from respective essays and their authors. Although formed on top of careful research and reputably accurate sources, Sebastien Bischeri and his associates cannot guarantee the reported data’s accuracy and thoroughness. The opinions published above neither recommend nor offer any securities transaction. Mr. Bischeri is not a Registered Securities Advisor. By reading Sebastien Bischeri’s reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Sebastien Bischeri, Sunshine Profits’ employees, affiliates as well as their family members may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.

 

Dollar Strength Holds Back Asian FX; Rupee Bears Re-emerge: Reuters poll

Long positions on the Singapore dollar, Taiwan’s dollar and the Indian rupee were reversed, while bearish views on the South Korean won hit a two-year peak, the poll of 12 respondents showed.

The Indonesian rupiah was the only currency with a bullish trend, although long bets were almost halved.

The safe-haven greenback has risen to a one-year high since the Federal Reserve’s hawkish tilt two weeks ago led markets to price in a rate hike sometime in 2022, with sharp gains in benchmark Treasury yields adding to its appeal.

The dollar is expected to dominate the currency markets for another year as inflation concerns come to the fore, with surging energy prices amid a supply crunch threatening global economic growth.

Asia’s economic prospects have already been marred by China’s slowdown, supply chain bottlenecks and lingering effects of devastating COVID-19 waves in trade-reliant countries like Singapore, Thailand and the Philippines.

However, bets on the yuan barely changed as the currency remained resilient despite a debt crisis at property giant China Evergrande, which HSBC partly attributed to the onshore market’s hope for a policy fine-tuning by the Chinese central bank.

Crude prices testing $80 per barrel prompted investors to turn bearish on the rupee for the first time since mid-August, as India is the world’s third-biggest oil consumer. The rupee has been the most heavily sold currency in Asia since the Fed meeting.

Analysts at Barclays said a recent slowdown in foreign fund flows into Indian equities seemed to be compensated by a pick-up in bonds as the economy’s growth trajectory was intact and would keep the rupee from breaching the 75.0 per dollar mark.

Taiwan and South Korea’s currencies have depreciated in tandem with a sell-off in local bourses dominated by tech stocks, which are sensitive to inflation. They have faced outflows of $2.13 billion and $762 million, respectively, so far this month.

Meanwhile, investors preferred the rupiah more among Asian currencies as higher commodity prices and a large trade surplus were seen putting a floor under the risky currency, Barclays analysts said.

The Asian currency positioning poll is focused on what analysts and fund managers believe are the current market positions in nine Asian emerging market currencies: the Chinese yuan, South Korean won, Singapore dollar, Indonesian rupiah, Taiwan dollar, Indian rupee, Philippine peso, Malaysian ringgit and the Thai baht.

The poll uses estimates of net long or short positions on a scale of minus 3 to plus 3. A score of plus 3 indicates the market is significantly long U.S. dollars.

The figures include positions held through non-deliverable forwards (NDFs).

For a look at all of today’s economic events, check out our economic calendar.

(Reporting by Anushka Trivedi in Bengaluru; Editing by Subhranshu Sahu)

India’s Factory Activity Improved in Sept as Demand Strengthened

That recovery might continue for at least a few months,supported by ultra-easy monetary policy and continued fiscalspending.

A hike in the Reserve Bank of India’s key interest ratelooks to be a rare possibility until at least next fiscal yearand India’s government said earlier this week it would continuewith its borrowing-backed spending to revive the economy.

The Manufacturing Purchasing Managers’ Index,compiled by IHS Markit, rose to 53.7 in September from 52.3 inAugust, staying above the 50-level separating growth fromcontraction for the third straight month.

“Indian manufacturers lifted production to a greater extentin September as they geared up for improvements in demand andthe replenishment of stocks,” noted Pollyanna De Lima, economicsassociate director at IHS Markit.

“There was a substantial pick-up in intakes of new work,with some contribution from international markets.”

Improvements in both domestic and overseas demand saw neworders expand at a quicker pace in September and factoriesraised output at a significantly faster rate compared to August.

However, that failed to encourage factories to hire moreworkers – a much needed step to boost weak labour marketconditions – and instead they reduced their workforce at thesharpest pace in four months.

“Companies continued to purchase extra inputs in September,but jobs were little changed over the month. In some instances,survey participants indicated that government guidelinessurrounding shift work prevented hiring,” added De Lima.

Meanwhile, after moderating in the first two months of lastquarter input cost inflation hit a five-month high, partlydriven by rising fuel prices, transportation costs andsupply-chain disruptions.

But output prices increased at a weaker pace, indicatingfirms were only able to partially pass on the extra costs tocustomers.

Still, optimism about the year ahead improved slightly lastmonth as a continued easing of pandemic mobility restrictionsraised hopes for a further improvement in demand.

For a look at all of today’s economic events, check out our economic calendar.

(Reporting by Indradip Ghosh; Editing by Kim Coghill)

Short Bets on Asian Currencies Creep up on Fed Taper Outlook: Reuters poll

In its policy meeting on Wednesday, the Fed left key rates unchanged and didn’t announce the start of its asset purchase tapering, as expected, but Chair Jerome Powell said board members believed tapering could conclude in the mid of next year, paving the way for potential rate hikes.

The Fed’s stance sent the dollar to its highest level in a month on Thursday, while its counterparts in Asia were broadly unchanged.

Mildly bullish positions in the yuan from two weeks ago were reversed, the poll of 11 respondents showed, on concerns over the fate of embattled property developer China Evergrande – Asia’s biggest junk bond issuer and a key component of the Chinese economy.

Losses in the yuan, however, were capped after the heavily indebted property giant said it would make a bond coupon payment on Thursday, easing some fears of a possible default. Financial markets were closed in China and Taiwan through Tuesday and in South Korea until Wednesday for the Mid-Autumn Festival holiday.

Short bets on the South Korean won climbed to their highest level since March last year, while bear positions rose significantly in the Thai baht and the Philippine peso.

As Thailand continues to reel under its most severe coronavirus outbreak, the government announced plans on Wednesday to speed up vaccinations and said it would introduce urgent stimulus measures.

Most of Thailand’s 1.5 million infections and 15,000 deaths occurred since April, following a year of successful containment during which its key tourism sector collapsed.

The Philippines eased some curbs last week, allowing small businesses in its capital region to reopen after being shut for weeks as the country fights one of Asia’s worst COVID-19 outbreaks.

Long bets on the Indonesian rupiah firmed after the country’s central bank left policy steady earlier this week and kept its target range for 2021 growth unchanged after a downgrade in July.

The Reuters survey is focused on what analysts believe are the current market positions in nine Asian emerging market currencies: the Chinese yuan, South Korean won, Singapore dollar, Indonesian rupiah, Taiwan dollar, Indian rupee, Philippine peso, Malaysian ringgit and the Thai baht.

The poll uses estimates of net long or short positions on a scale of minus 3 to plus 3.

A score of plus 3 indicates the market is significantly long U.S. dollars. The figures included positions held through non-deliverable forwards (NDFs).

The survey findings ASIAPOSN are provided below (positions in U.S. dollar versus each currency):

DATE USD/CNY USD/KRW USD/SGD USD/IDR USD/TWD USD/INR USD/MYR USD/PHP USD/THB

23/09 0.25 0.96 -0.15 -0.50 -0.20 -0.45 0.25 0.56 0.75

09/09 -0.09 0.33 -0.36 -0.44 -0.69 -0.88 0.23 0.40 0.12

26/08 0.425 0.868 0.474 0.18 0.326 -0.08 1.1922 0.779 1.351

12/08 0.32 0.69 0.77 0.2 -0.09 0.37 1.39 1.17 1.75

29/07 0.27 0.78 0.71 0.27 0.36 0.29 1.4 1.21 1.49

15/07 -0.15 0.27 0.53 0.23 0.13 0.68 1.06 1.06 1.56

01/07 -0.29 -0.29 0.02 0.36 -0.19 0.5 0.49 -0.04 0.85

17/06 -0.63 -0.36 -0.49 -0.5 -0.58 -0.21 -0.05 -0.31 0.2

03/06 -1.34 -0.51 -0.55 -0.4 -0.44 -0.71 0.32 -0.66 0.37

20/05 -0.33 0.43 0.37 -0.06 0.33 -0.03 0.26 -0.22 0.81

06/05 -0.52 -0.39 -0.58 0.31 -0.59 0.86 -0.04 -0.35 0.5

(Reporting by Rushil Dutta; polling by Harish Sridharan in Bengaluru; Editing by Saumyadeb Chakrabarty)

USD/CAD: Loonie Strengthens as Oil Prices Rise on U.S. Supply Concerns

The Canadian dollar strengthened against its U.S. counterpart on Monday after oil prices climbed over $70 a barrel as U.S. supplies have been restricted following Hurricane Ida, which hit almost half of crude production in key producing regions.

The USD/CAD pair fell to 1.2643 today, down from Friday’s close of 1.2689. The Canadian dollar lost over 1.2% last month and has depreciated about 0.3% so far this month.

Canada is the world’s fourth-largest exporter of oil, which edge higher on low U.S. output after Hurricane Ida. U.S. West Texas Intermediate (WTI) crude futures were trading 1.05% higher at $70.46 a barrel. Higher oil prices lead to higher U.S. dollar earnings for Canadian exporters, resulting in an increased value of the loonie.

“The electoral campaign in Canada is set to remain in focus with only 10 days to go before the vote, and we think that CAD is currently discounting some political risk as opinion polls show neither of the two major parties (Liberals and Conservatives) as likely to secure a full majority in the House,” noted Francesco Pesole, FX Strategist at ING.

“Next week, CPI data will be the main highlight and another above-consensus read may further support hawkish expectations on the BoC, but once again, political risk may cap CAD gains for now. Once political uncertainty dissipates, a short-term undervaluation vs USD (2.1%, according to our fair value model) and solid fundamentals all point to a rebound in the loonie, in our view.”

The dollar index, which measures the value of the dollar against six foreign currencies, was trading 0.02% higher at 92.599. On Tuesday, September 14, the consumer price index is scheduled to be released. Global trends and inflation data will drive equity markets next week, which after a run of record-breaking trades have taken a breather. If the data continues to be hot, Treasury yields could rise, which would be negative for the market.

However, it is highly likely that the world’s dominant reserve currency, the USD, will rise by end of the year, largely due to the expectation of two rate hikes by the Fed in 2023. With the dollar strengthening and a possibility that the Federal Reserve will raise interest rates earlier than expected, the USD/CAD pair may experience a rise.

In August, Canada added 90,200 jobs, and the unemployment rate fell to 7.1%, its lowest level since the Coronavirus pandemic began. The data might support the Bank of Canada’s next taper in October. The Governor of the Bank of Canada, Tiff Macklem, said on Thursday that Canada is on its way to no longer needing quantitative easing to stimulate the economy.

Last week, the Bank of Canada held its key interest rate, citing fears that the pandemic and supply bottlenecks might stall the economic recovery. The central bank has maintained its overnight rate target at 0.25% and said it will continue buying bonds at a rate of $2 billion a week as part of its quantitative easing program.

Dollar Drops With US Yields, Euro Buoyed as ECB Trims Emergency Support

The greenback has largely moved in line with Treasury yields this week. Yields fell on Thursday after the Treasury completed $120 billion in coupon-bearing supply scheduled for this week.

Against a basket of peers, the dollar is holding above a one-month low reached on Friday when jobs data for August showed that jobs growth slowed.

The dollar index dropped 0.23% to 92.47, up from a one-month low of 91.94 on Friday.

Investors are focused on when the Federal Reserve is likely to begin paring bond purchases as it balances rising price pressures against a still relatively soft employment picture.

Chicago Federal Reserve President Charles Evans on Thursday said the U.S. economy is “not out of the woods yet,” and that despite strong economic growth and the promise of vaccines, challenges remain, including supply chain and labor market bottlenecks.

Fed Governor Michelle Bowman, meanwhile, added her voice to the growing number of policymakers who say the weak August jobs report likely won’t throw off the central bank’s plan to trim its $120 billion in monthly bond purchases later this year.

Data on Thursday showed that the number of Americans filing new claims for jobless benefits fell last week to the lowest level in nearly 18 months, offering more evidence that job growth was being hindered by labor shortages rather than cooling demand for workers.

The euro was also supported after the ECB maintained a dovish tone and offered no major surprises as it took a first small step toward unwinding the emergency aid that has propped up the euro zone economy during the pandemic.

In the past two quarters, the bank has purchased around 80 billion euros worth of debt each month. It provided no numerical guidance for the three months ahead, but analysts had predicted before the meeting that purchases would fall to between 60 billion and 70 billion euros in those months.

“The ECB is delivering mainly as expected today,” analysts at TD Securities said in a report. “Looking ahead, the focus will be on how the ECB defines “moderately” – anything less than €60bn/mo could be bearish.”

The euro gained 0.11% on the day to $1.1828.

Bitcoin edged higher it attempted to recover from a large and sudden price drop on Tuesday.

The cryptocurrency gained 1.28% to $46,680.

For a look at all of today’s economic events, check out our economic calendar.

(Reporting by Karen Brettell; Editing by Philippa Fletcher and Jonathan Oatis)

 

Easing Virus Woes Lift Asia FX View; Baht Bears at 6-Month Low – Reuters Poll

Countries, including Malaysia, Indonesia, and Thailand, have seen a drop in infections, enabling them to relax restrictions, while Singapore last month became the world’s most vaccinated country after it fully inoculated 80% of its population.

The U.S. Federal Reserve holding off on earlier-than-expected tapering of its massive asset purchases kept the dollar in check and further supported sentiment towards emerging currencies.

Investors placed long bets on the Chinese yuan for the first time since mid-July, and cut short bets on South Korea’s won, Malaysia’s ringgit and the Philippine peso, according to the poll of 11 respondents.

They also turned bullish on Singapore’s dollar and Indonesia’s rupiah for the first time since mid-June.

Short positions on the baht unwounded to their lowest since Feb. 25 as the tourism-reliant economy relaxed COVID-19 curbs, prompting its leading joint-business group to raise its 2021 economic forecast.

Market view of the region’s worst performing currency this year was also buttressed after Prime Minister Prayuth Chan-ocha survived a no confidence vote in parliament last week.

The baht is not out of woods yet, however, analysts at DBS Bank said while highlighting Thailand’s flip to a current account deficit since last year and potential policy normalisation from the Fed.

“Thailand’s need for external financing is coming at a potentially challenging period. The Thai baht is therefore vulnerable to any surprise in the Fed’s hawkish tilt,” they said.

The baht was seen weakening to 35-36 against the greenback by the first quarter of 2022. The currency traded at around 32.70 against the dollar on Thursday.

Long bets on India’s rupee rose to their highest in more than six months, as investors were convinced that a sustained economic recovery was underway despite warnings of a possible third wave of COVID-19 infections.

“Policy makers are likely to remain wary about potential increases in infections and their impact on economic activity,” Standard Chartered Global Research said in a note this week.

“However, given the recent increase in vaccinations and the reduced sensitivity of economic activity to COVID-19 infections, the impact of any future rise in infections is unlikely to derail the recovery process.”

The Reuters survey is focused on what analysts believe are the current market positions in nine Asian emerging market currencies: the Chinese yuan, South Korean won, Singapore dollar, Indonesian rupiah, Taiwan dollar, Indian rupee, Philippine peso, Malaysian ringgit and the Thai baht.

The poll uses estimates of net long or short positions on a scale of minus 3 to plus 3.

A score of plus 3 indicates the market is significantly long U.S. dollars. The figures included positions held through non-deliverable forwards (NDFs).

The survey findings ASIAPOSN are provided below (positions in U.S. dollar versus each currency):

DATE USD/CNY USD/KRW USD/SGD USD/IDR USD/TWD USD/INR USD/MYR USD/PHP USD/THB

09/09 -0.09 0.33 -0.36 -0.44 -0.69 -0.88 0.23 0.40 0.12

26/08 0.425 0.868 0.474 0.18 0.326 -0.08 1.1922 0.779 1.351

12/08 0.32 0.69 0.77 0.2 -0.09 0.37 1.39 1.17 1.75

29/07 0.27 0.78 0.71 0.27 0.36 0.29 1.4 1.21 1.49

15/07 -0.15 0.27 0.53 0.23 0.13 0.68 1.06 1.06 1.56

01/07 -0.29 -0.29 0.02 0.36 -0.19 0.5 0.49 -0.04 0.85

17/06 -0.63 -0.36 -0.49 -0.5 -0.58 -0.21 -0.05 -0.31 0.2

03/06 -1.34 -0.51 -0.55 -0.4 -0.44 -0.71 0.32 -0.66 0.37

20/05 -0.33 0.43 0.37 -0.06 0.33 -0.03 0.26 -0.22 0.81

06/05 -0.52 -0.39 -0.58 0.31 -0.59 0.86 -0.04 -0.35 0.5

(Reporting by Shashwat Awasthi; editing by Uttaresh.V)

USD/INR: Rupee Extends Losses, Falls 8 Paise in Early Trade

The Indian rupee opened lower, depreciating by 8 paise against the U.S. dollar in early trade Tuesday as strong greenback and volatility in the domestic equity market continued to pressurize the battered Asian currency.

The rupee hit a three-month low on Monday as traders moved to the safety of the U.S. dollar amid rising COVID-19 cases that threaten to derail the global economic recovery.

The dollar to rupee conversion today rose to 74.95 against the U.S. currency, up from Monday’s close of 74.87. The rupee has lost over 170 paise in June – posting the biggest monthly drop since March 2020, the early days of the pandemic, and weakened over 60 paise so far this month.

“The rupee witnessed sharp depreciation against the dollar in the last session and lost 55 paise amid a strengthening dollar index. The safe-haven US dollar moved higher against a basket of major currencies on Monday as investors grew nervous about a raging coronavirus variant that could threaten the outlook for a global economic recovery. The greenback jumped even as the US 10-year Treasury yield dropped to a more than the five-month low of 1.176%,” noted analysts at ICICI Direct.

“The USD to INR has moved higher towards 75 levels surpassing its highest Call base. Continued up move towards 75.50 is expected in the coming sessions. The dollar to rupee July contract on the NSE was at 75.02 in the last session. The open interest fell almost 1% for the July series while August series OI increased by almost 60%.”

The dollar index, a measurement of the dollar’s value relative to six foreign currencies, was trading nearly flat at 92.894 – not far from this year’s high of 93.437.

The world’s dominant reserve currency, the USD, is expected to rise further over the coming year, largely driven by the Fed’s expectation of two rate hikes in 2023. A strengthening dollar and growing risk that the Federal Reserve would tighten its monetary policy earlier than expected would push the USD to INR pair higher.

It is worth noting that sustained foreign fund outflows, higher oil prices, and firm U.S. dollar will continue to weigh on the rupee.

Global oil benchmark Brent futures traded 0.12% higher at $68.70 per barrel at the time of writing. Earlier this month, oil prices spiked to a three-year high of $77.84 per barrel as OPEC+ failed to reach an agreement. Higher oil prices would push up the inflation expectations and widen India’s trade deficit, which could hurt the Indian rupee.

The benchmark equity indices BSE Sensex was trading 290 points or 0.56% lower at 52,262.45, while the broader NSE Nifty slumped 95.90 points or 0.61% to 15,655.35. Foreign institutional investors were net sellers in the capital market on Monday as they offloaded shares worth Rs 2,198.71 crore, as per exchange data.

USD/INR: Rupee Slumps 25 Paise, Further Downside Risks Remain

The Indian rupee opened lower, depreciating by over 25 paise against the U.S. dollar in early trade Monday as firm greenback and weakness in the domestic equity market continued to pressurise the battered Asian currency.

The dollar to rupee conversion today rose to 74.8125 against the U.S. currency, up from Friday’s close of 74.56. The rupee has lost over 170 paise in June – posting the biggest monthly drop since March 2020, the early days of the pandemic, and weakened about 49 paise so far this month.

“The rupee continued to trade in a range and last Friday ended almost flat, down 2 paise. The dollar posted modest gains on stronger-than-expected US June retail sales data. The dollar also garnered some support from a fall in the S&P 500 to a one-week low, which boosted the dollar’s liquidity demand,” noted analysts at ICICI Direct.

“The USD to INR is seeing contracting volatility while the trading range has been narrowing for a few sessions. Looking at the writing in OTM Call we feel upsides seem limited. The dollar to rupee July contract on the NSE was at 74.71 in the last session. The open interest fell 1.8% for the July series.”

The dollar index, a measurement of the dollar’s value relative to six foreign currencies, was trading 0.25% higher at 92.911 – not far from this year’s high of 93.437. That gain was largely driven by safe-haven buying as rising COVID-19 cases threaten to derail the global economic recovery.

“Although the cautious tone by Fed Chair Jerome Powell about the risks of persistent inflation and the need to taper asset purchases was not enough to trigger a sustained recovery in risk sentiment late last week, we look for a limited upside to trade weighed dollar this week,” noted analysts at ING.

“Not only it is a fairly calm week on the US data front (suggesting limited catalysts for a domestically driven USD rally), but the possibly cautious/dovish ECB on Thursday can provide a boost to cyclical FX, which would also spill over into the USD crosses (though EUR/USD would still decline).”

The world’s dominant reserve currency, the USD, is expected to rise further over the coming year, largely driven by the Fed’s expectation of two rate hikes in 2023. A strengthening dollar and growing risk that the Federal Reserve would tighten its monetary policy earlier than expected would push the USD to INR pair higher.

It is worth noting that sustained foreign fund outflows, higher oil prices, and firm U.S. dollar will continue to weigh on the rupee.

Global oil benchmark Brent futures traded 1.54% lower at $72.46 per barrel at the time of writing. Earlier this month, oil prices spiked to a three-year high of $77.84 per barrel as OPEC+ failed to reach an agreement. Higher oil prices would push up the inflation expectations and widen India’s trade deficit, which could hurt the Indian rupee.

The benchmark equity indices BSE Sensex was trading 599 points or 1.13% lower at 52,547.89, while the broader NSE Nifty slumped 170.55 points or 1.07% to 15,752.40. Foreign institutional investors were net sellers in the capital market on Friday as they offloaded shares worth Rs 466.30 crore, as per exchange data.

USD/INR: Rupee Remains Range-Bound, Likely to Turn Volatile

The Indian rupee opened marginally lower but remained range-bound in lackluster trade against the U.S. dollar in early session Friday amid volatility seen in the domestic equity market.

The dollar to rupee conversion today opened at 74.54 against the U.S. currency, up from Thursday’s close of 74.5375. The rupee has lost over 170 paise in June – posting the biggest monthly drop since March 2020, the early days of the pandemic, and weakened about 19 paise so far in this month.

“The rupee traded in a narrow and tight band throughout the day. Yesterday, it managed to sustain well above 74.50 levels and ended with gains of 4 paise. The Dollar index posted moderate gains. A drop in US weekly jobless claims to a new pandemic low supported gains in the dollar along with hawkish Fed comments,” noted analysts at ICICI Direct.

“The USD to INR is seeing contracting volatility while the trading range has been narrowing for a few sessions. We feel the rupee should move towards 74.4 levels in the coming days whereas upsides seem limited. The dollar to rupee July contract on the NSE was at 74.65 in the last session. The open interest fell 3.2% for the July series.”

The dollar index, a measurement of the dollar’s value relative to six foreign currencies, was trading 0.05% lower at 92.583 – not far from its three-month high of 92.844.

The world’s dominant reserve currency, the USD, is expected to rise further over the coming year, largely driven by the Fed’s expectation of two rate hikes in 2023. A strengthening dollar and growing risk that the Federal Reserve would tighten its monetary policy earlier than expected would push the USD to INR pair higher.

It is worth noting that sustained foreign fund outflows, higher oil prices, and firm U.S. dollar will continue to weigh on the rupee.

Global oil benchmark Brent futures traded nearly flat at $73.48 per barrel at the time of writing. Last week, oil prices spiked to a three-year high of $77.84 per barrel as OPEC+ failed to reach an agreement. Higher oil prices would push up the inflation expectations and widen India’s trade deficit, which could hurt the Indian rupee.

The benchmark equity indices BSE Sensex was trading 25.4 points or 0.05% higher at 53,188.10, while the broader NSE Nifty advanced 12.75 points or 0.08% at 15,936.00. Foreign institutional investors were net sellers in the capital market on Thursday as they offloaded shares worth Rs 264.77 crore, as per exchange data.

USD/INR: Rupee Opens Higher, Gains 10 Paise In Early Trade

The Indian rupee opened higher, appreciating by over 8 paise against the U.S. dollar in early trade Thursday amid buying seen in the domestic equity market.

The dollar to rupee conversion today fell to 74.4775 against the U.S. currency, down from Wednesday’s close of 74.5825. The rupee has lost over 170 paise in June – posting the biggest monthly drop since March 2020, the early days of the pandemic, and weakened over 15 paise so far in this month.

“The rupee continued to trade in a range and fell by 9 paise to close near 74.58 in the last session. The Dollar index fell marginally from its three-month high as comments on Wednesday from Fed chair Powell sent T-notes yield lower and undercut the dollar when he said the US economy has not yet achieved substantial further progress,” noted analysts at ICICI Direct.

“The USD to INR is lacking volatility and no major OI activity are observed, indicating it would trade in a range of 74.40-74.80 in the coming session. The dollar to rupee July contract on the NSE was at 74.66 in the last session. The open interest rose 0.4% for the July series.”

The dollar index, a measurement of the dollar’s value relative to six foreign currencies, was trading nearly flat at 92.410 – not far from its three-month high of 92.844.

The world’s dominant reserve currency, the USD, is expected to rise further over the coming year, largely driven by the Fed’s expectation of two rate hikes in 2023. A strengthening dollar and growing risk that the Federal Reserve would tighten its monetary policy earlier than expected would push the USD to INR pair higher.

“We updated our currency forecasts to reflect a neutral view on the USD this year and our expectation that it will strengthen next year. The timing of the change from neutral to bullish will depend on the COVID-19 situation and central bank tightening intentions,” noted analysts at UBS.

It is worth noting that sustained foreign fund outflows, higher oil prices and firm U.S. dollar will continue to weigh on the rupee.

Global oil benchmark Brent futures traded 0.74% lower at $74.20 per barrel at the time of writing. Last week, oil prices spiked to a three-year high of $77.84 per barrel as OPEC+ failed to reach an agreement. Higher oil prices would push up the inflation expectations and widen India’s trade deficit, which could hurt the Indian rupee.

The benchmark equity indices BSE Sensex was trading 124 points or 0.23% higher at 53,028, while the broader NSE Nifty advanced 32.85 points or 0.20% at 15,885.90. Foreign institutional investors were net sellers in the capital market on Wednesday as they offloaded shares worth Rs 1303.95 crore, as per exchange data.

USD/INR: Rupee Snaps Three-Day Gaining String, Down 12 Paise In Early Trade

The Indian rupee snapped three-day gains, depreciating by over 12 paise against the U.S. dollar in early trade Wednesday as the firm greenback and volatile domestic equities weighed on the battered Asian currency.

The dollar to rupee conversion today rose to 74.6125 against the U.S. currency, up from Tuesday’s close of 74.4925. The rupee has lost over 170 paise in June – posting the biggest monthly drop since March 2020, the early days of the pandemic, and weakened about 29 paise so far in this month.

“The rupee continued to appreciate on the back of positive domestic equities and no major rise in oil prices. The dollar on Tuesday posted moderate gains. A larger-than-expected increase in US June consumer prices pushed T-note yields higher and supported gains in the dollar. Also, weakness in US stock indices on Tuesday spurred some liquidity demand for the dollar. EUR/US$ fell moderately on dollar strength,” noted analysts at ICICI Direct.

“The USD to INR pair is struggling at higher levels. Due to no major move in the Dollar index and strong domestic equities, we feel a move towards 74.4 is expected. The dollar to rupee July contract on the NSE was at 74.61 in the last session. The open interest fell 6% for the July series.”

The dollar index, a measurement of the dollar’s value relative to six foreign currencies, was trading 0.07% lower at 92.685 – not far from its three-month high of 92.844.

The world’s dominant reserve currency, the USD, is expected to rise further over the coming year, largely driven by the Fed’s expectation of two rate hikes in 2023. A strengthening dollar and growing risk that the Federal Reserve would tighten its monetary policy earlier than expected would push the USD to INR pair higher.

Investors are now looking ahead to Fed Chairman Jerome Powell’s testimony before the Senate Banking Committee on Wednesday.

It is worth noting that sustained foreign fund outflows, higher oil prices, and firm U.S. dollar will continue to weigh on the rupee.

“There are 4 reasons why significant USD gains over the next 6-12m look unlikely – (1) Citi’s data momentum indices point in favor of Europe; (2) Whilst the Fed may normalize before the ECB/ BoJ, it is still expected to lag other major CBs (BoC, RBNZ, perhaps even RBA and BoE), that may see relatively tepid USD gains vs. these CBs; (3) Elevated commodity prices to support CAD, AUD and NZD; and (4) In the near term (0-3m), DXY seems to have overshot “fair value” as US real yields continue to fall. But eventual Fed tightening via tapering is expected to put upwards pressure on US real yields which would justify a slightly stronger USD over time,” noted analysts at Citi.

Global oil benchmark Brent futures traded 0.20% lower at $76.35 per barrel at the time of writing. Last week, oil prices spiked to a three-year high of $77.84 per barrel as OPEC+ failed to reach an agreement. Higher oil prices would push up the inflation expectations and widen India’s trade deficit, which could hurt the Indian rupee.

The benchmark equity indices BSE Sensex was trading 92 points or 0.16% higher at 52,856.45, while the broader NSE Nifty advanced 23.50 points or 0.15% at 15,835.95. Foreign institutional investors were net buyers in the capital market on Tuesday as they purchased shares worth Rs 113.83 crore, as per exchange data.

USD/INR: Rupee Extends Gains to Third Day Amid Subdued Dollar, Gains 14 Paise In Early Trade

The Indian rupee strengthened for the third straight session, appreciating by over 14 paise against the U.S. dollar in early trade Tuesday as the greenback softened ahead of the release of key U.S. inflation data.

The dollar to rupee conversion today fell to 74.425 against the U.S. currency, down from Monday’s close of 74.57. The rupee has lost over 170 paise in June – posting the biggest monthly drop since March 2020, the early days of the pandemic, and weakened about 10 paise so far in this month.

“The rupee traded flat in the first half. However, it depreciated almost 13 paise in the second half and ended near 74.75 levels. The dollar on Monday posted moderate gains on weakness in EUR/US$ and strength in US$/JPY. EUR/US$ fell after ECB President Lagarde signaled the ECB may begin fresh stimulus measures next year after its PEPP program expires,” noted analysts at ICICI Direct.

The dollar index, a measurement of the dollar’s value relative to six foreign currencies, was trading 0.05% lower at 92.216, edging lower as weak U.S. data and a fresh surge in COVID-19 cases worldwide has sparked concerns that the nascent economic recovery is already running out of steam.

Investors are now looking ahead to U.S. inflation data for June on Tuesday and Fed Chairman Jerome Powell’s testimony before the Senate Banking Committee on Wednesday.

The world’s dominant reserve currency, the USD, is expected to rise further over the coming year, largely driven by the Fed’s expectation of two rate hikes in 2023. A strengthening dollar and growing risk that the Federal Reserve would tighten its monetary policy earlier than expected would push the USD to INR pair higher.

“Having been bearish on the dollar since April 2020, this month we feel compelled to outline a more positive medium-term scenario. At the heart of this is the likelihood that the Fed’s exit sequence from ultra-loose monetary policy is more compressed than they would have us believe. ING now sees the first hike in 3Q22,” noted analysts at ING.

“2Q22 is when the dollar should be rallying more broadly – coinciding with some decisive bearish flattening in the US yield curve.”

It is worth noting that sustained foreign fund outflows, higher oil prices, and firm U.S. dollar will continue to weigh on the rupee.

Global oil benchmark Brent futures traded 0.27% higher at $75.36 per barrel at the time of writing. Last week, oil prices spiked to a three-year high of $77.84 per barrel as OPEC+ failed to reach an agreement. Higher oil prices would push up the inflation expectations and widen India’s trade deficit, which could hurt the Indian rupee.

The benchmark equity indices BSE Sensex was trading 257 points or 0.49% higher at 52,626.71, while the broader NSE Nifty advanced 74.45 points or 0.47% at 15,766.10. Foreign institutional investors were net sellers in the capital market on Friday as they offloaded shares worth Rs 745.97 crore, as per exchange data.

USD/INR: Rupee Opens Higher, Gains 22 Paise In Early Trade

The Indian rupee opened higher, appreciating by over 22 paise against the U.S. dollar in early trade Monday amid buying seen in the domestic equity market.

The dollar to rupee conversion today fell to 74.415 against the U.S. currency, down from Friday’s close of 74.6375. The rupee has lost over 170 paise in June – posting the biggest monthly drop since March 2020, the early days of the pandemic, and weakened about 10 paise so far in this month.

“The rupee reverted 8 paise and ended near 74.62 in the last session. We feel the rupee would remain in a range in the coming days. The dollar fell moderately as a rally in stocks curbed liquidity demand for the dollar. The S&P 500 rallied to a new record high on Friday after China’s central bank boosted liquidity in the financial system by cutting the reserve requirement ratio for banks by -0.5 percentage point to 12.0,” noted analysts at ICICI Direct.

The dollar index, a measurement of the dollar’s value relative to six foreign currencies, was trading 0.06% higher at 92.182, edging lower as weak U.S. data and a fresh surge in COVID-19 cases worldwide has sparked concerns that the nascent economic recovery is already running out of steam.

US Dollar is expected to trade with negative bias amid rise in risk appetite in the global markets. Further, traders will remain vigilant ahead of key economic data from US and US Federal Reserve chairman Powell testimony before House Financial Services Committee and Senate Banking Committee,” noted analysts at Sharekhan by BNP Paribas.

“However, the sharp downside may be cushioned on rise in US treasury yields, divergence in global monetary policies and on concern that spread of highly infectious Delta Variant of the virus may derail the global economic recovery. Moreover, a rapid vaccination program will lead to economic reopening. 159.2 million people or 48% of US population have been fully vaccinated and 184.1 million people or 55.5% of the population have received at least 1 dose.”

Investors are now looking ahead to U.S. inflation data for June on Tuesday and Fed Chairman Jerome Powell’s testimony before the Senate Banking Committee on Wednesday.

The world’s dominant reserve currency, the USD, is expected to rise further over the coming year, largely driven by the Fed’s expectation of two rate hikes in 2023. A strengthening dollar and growing risk that the Federal Reserve would tighten its monetary policy earlier than expected would push the USD to INR pair higher.

It is worth noting that sustained foreign fund outflows, higher oil prices, and firm U.S. dollar will continue to weigh on the rupee.

Global oil benchmark Brent futures traded 0.17% lower at $75.42 per barrel at the time of writing. Last week, oil prices spiked to a three-year high of $77.84 per barrel as OPEC+ failed to reach an agreement.

Higher oil prices would push up the inflation expectations and widen India’s trade deficit, which could hurt the Indian rupee.

The benchmark equity indices BSE Sensex was trading 250 points or 0.48% higher at 52,637, while the broader NSE Nifty advanced 76.7 points or 0.49% at 15,766.45.

Foreign institutional investors were net sellers in the capital market on Friday as they offloaded shares worth Rs 1,124.65 crore, while domestic institutional investors bought shares worth Rs 106.55 crore, as per exchange data.

USD/INR: Rupee Snaps Two-Day Losing Streak, Gains 9 Paise In Early Trade

The Indian rupee snapped its two-day losing streak in early trade on Friday, appreciating by about 9 paise against the U.S. dollar amid sell-off seen in the equity market.

The dollar to rupee conversion today fell to 74.6150 against the U.S. currency, down from Thursday’s close of 74.705. The rupee has lost over 170 paise in June – posting the biggest monthly drop since March 2020, the early days of the pandemic, and weakened about 30 paise so far in this month.

“Weakness continued in the rupee, which depreciated by another 8 paise and closed at 74.7 levels. A sharp reversal in equities from higher levels triggered more selling. The dollar index posted moderate losses as it retreated from Wednesday’s three-month high. The dollar was weighed down on Thursday by negative carryover from Wednesday’s dovish minutes of the June 15-16 FOMC meeting,” noted analysts at ICICI Direct.

The dollar index, a measurement of the dollar’s value relative to six foreign currencies, was trading 0.03% higher at 92.448 – not far from its three-month high of 92.844.  That was largely driven by the minutes of the Federal Reserve’s June policy meeting which reaffirmed that the U.S. central bank to continue to make progress in scaling back its massive asset purchases as soon as this year.

The world’s dominant reserve currency, the USD, is expected to rise further over the coming year, largely driven by the Fed’s expectation of two rate hikes in 2023. A strengthening dollar and growing risk that the Federal Reserve would tighten its monetary policy earlier than expected would push the USD to INR pair higher.

“Inflation has risen strongly in recent months, with the Fed surprising markets at the June meeting with a more hawkish stance. Meanwhile, the June labor market data confirmed that a solid US economic recovery is underway. Against this backdrop, the UBS Chief Investment Office is updating their forecasts to reflect a neutral view on the US dollar this year and strength next year,” noted analysts at UBS.

“Last year’s unprecedented expansion of the US Federal Reserve’s balance sheet has brought about a broad US dollar weakness. This phase is now gradually coming to an end, and CIO expects the next wave of USD appreciation to arrive early next year, or maybe even late this year. CIO, therefore, believes that the time has come to adjust their cyclical USD view.”

It is worth noting that sustained foreign fund outflows, higher oil prices, and firm U.S. dollar will continue to weigh on the rupee.

Global oil benchmark Brent futures traded 0.13% higher at $74.22 per barrel at the time of writing. On Tuesday, oil prices spiked to a three-year high of $77.84 per barrel as OPEC+ failed to reach an agreement. Higher oil prices would push up the inflation expectations and widen India’s trade deficit, which could hurt the Indian rupee.

The benchmark equity indices BSE Sensex was trading 121 points or 0.23% lower at 52,442, while the broader NSE Nifty traded 25.05 points or 0.16% lower at 15,702.05. Foreign institutional investors were net sellers in the capital market on Thursday as they offloaded shares worth Rs 554.92 crore, as per exchange data.

USD/INR: Rupee Opens Lower for Second Straight Day, Falls 19 Paise In Early Trade

The Indian rupee opened lower for a second straight day, depreciating by over 19 paise against the U.S. dollar in early trade Thursday as the greenback traded near its highest in the last three months after the Fed minutes reaffirmed taper timeline.

“Among EM currencies, the rupee remained one of the underperformers and again depreciated against the dollar. It ended at 74.62 levels, down almost 8 paise. The dollar index rallied to a three-month high. Signs of strength in the US labour market supported gains. May JOLTS job openings rose to a record,” noted analysts at ICICI Direct.

“The USD to INR pair saw fresh accumulation from lower levels along with the Dollar Index moving to fresh three month’s high indicating a move towards 75 cannot be ruled out. The dollar to rupee July contract on the NSE was at 74.82 in the last session. The open interest rose 1.5% for the July series.”

The dollar to rupee conversion today rose to 74.81 against the U.S. currency, up from Wednesday’s close of 74.615. The rupee has lost over 170 paise in June – posting the biggest monthly drop since March 2020, the early days of the pandemic, and weakened more than 42 paise so far in this month.

The dollar index, a measurement of the dollar’s value relative to six foreign currencies, was trading 0.12% higher at 92.752 – close to its three-month high of 92.844.  That was largely driven by the minutes of the Federal Reserve’s June policy meeting which reaffirmed that the U.S. central bank to continue to make progress in scaling back its massive asset purchases as soon as this year.

The world’s dominant reserve currency, the USD, is expected to rise further over the coming year, largely driven by the Fed’s expectation of two rate hikes in 2023. A strengthening dollar and growing risk that the Federal Reserve would tighten its monetary policy earlier than expected would push the USD to INR pair higher.

It is worth noting that sustained foreign fund outflows, higher oil prices, and firm U.S. dollar will continue to weigh on the rupee.

Global oil benchmark Brent futures traded 0.03% lower at $73.41 per barrel at the time of writing. On Tuesday, oil prices spiked to a three-year high of $77.84 per barrel as OPEC+ failed to reach an agreement. Higher oil prices would push up the inflation expectations and widen India’s trade deficit, which could hurt the Indian rupee.

The benchmark equity indices BSE Sensex was trading 70 points or 0.12% lower at 52,987.06, while the broader NSE Nifty traded 27.25 points or 0.17% lower at 15,849.90. Foreign institutional investors were net buyers in the capital market on Wednesday as they purchased shares worth Rs 532.94 crore, as per exchange data.

USD/INR: Rupee Opens Weak, Falls Over 22 Paise Against Dollar in Early Trade

The Indian rupee broke its recent recovery trend in the early trading session Wednesday, depreciating by over 22 paise against the U.S. dollar as the greenback found safe-haven demand ahead of Fed’s June meeting minutes amid crude oil prices at a three-year high.

The dollar to rupee conversion today rose to 74.77 against the U.S. currency, up from Tuesday’s close of 74.5425. The rupee has lost over 170 paise in June – posting the biggest monthly drop since March 2020, the early days of the pandemic, and weakened more than 44 paise so far in this month.

“The rupee again depreciated against the USD and slipped almost 24 paise towards the end. The rupee closed at 74.54 levels while a reversal was seen post a sharp sell-off in equities,” noted analysts at ICICI Direct.

“The dollar index on Tuesday saw support ahead of Wednesday’s release of the minutes from the June 15-16 FOMC meeting, which could be hawkish for Fed policy and supportive of the dollar. FOMC members at that meeting began discussions of QE tapering.”

The dollar index, a measurement of the dollar’s value relative to six foreign currencies, was trading nearly flat at 92.54 – pulling back from three-month highs as rate hikes bets ebbed.

Investors will watch minutes from the Fed’s latest meeting – due on Wednesday – after the Fed brought forward its policy tightening timeline and surprised markets last month.

But the world’s dominant reserve currency, the USD, is expected to rise over the coming year, largely driven by the Fed’s dot plot released last week, which suggested an expectation of two rate hikes in 2023. A strengthening dollar and growing risk that the Federal Reserve would tighten its monetary policy earlier than expected would push the USD to INR pair higher.

The benchmark equity indices BSE Sensex was trading 26.23 points or 0.05% higher at 52,888.09, while the broader NSE Nifty traded nearly flat at 15,818.85.

It is worth noting that sustained foreign fund outflows, higher oil prices and firm U.S. dollar will continue to weigh on the rupee.

However, foreign institutional investors were net sellers in the capital market on Tuesday as they offloaded shares worth Rs 543.3 crore, as per exchange data.

Global oil benchmark Brent futures traded 0.03% lower at $74.52 per barrel at the time of writing. On Tuesday, oil prices spiked to a three-year high of $77.84 per barrel as OPEC+ failed to reach an agreement.

Higher oil prices would push up the inflation expectations and widen India’s trade deficit, which could hurt the Indian rupee.