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Updated December 27th, 2023 at 08:57 IST

Rupee gauges rally in oil prices, broadly softer dollar

The rupee's range has narrowed considerably in the wake of likely heavy intervention by the Reserve Bank of India on both sides.

Thomson Reuters
Rupee versus Dollar
Representative Image | Image:Unsplash

 

 

The rupee is likely to open little changed to the US dollar on Wednesday amid an uptick in most Asian currencies and a rally in oil prices.
Non-deliverable forwards indicate the rupee will open nearly unchanged from the previous close of 83.1925.
Brent crude reached a high of $81.72 during the New York session on Tuesday, the highest this month, amid Red Sea vessel attacks.
Brent is now up nearly 11 per cent from the mid-December lows.
"Well, you can say, oil is a bit of an issue (for the rupee) at the margin," said a forex trader at a bank.
Having said that, it is not much of a factor in the current scenario, the trader said, adding that a quiet session awaits the domestic currency around the 83.20 handle.
The rupee's range has narrowed considerably in the wake of likely heavy intervention by the Reserve Bank of India on both sides. The currency's realised volatility is at a multi-year low.
Asian currencies were quoted mostly higher, supported by bets that the US Federal Reserve will likely cut rates at its March meeting.
Investors have priced in nearly six rate cuts next year, double what Fed policymakers have forecast.
The Fed outlook has boosted risk appetite, with the S&P 500 Index approaching a record high. Indian equities have managed a 6.5 per cent rally in December on the back of foreign inflows worth $9.5 billion.
The dollar index was near 101.50, hovering near the lowest since July. The index has declined 1.8 per cent in December, adding to the 3 per cent drop in November.
The key indicators were the one-month non-deliverable rupee forward at 83.26 and the onshore one-month forward premium at 7.75 paisa.

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Published December 27th, 2023 at 08:57 IST

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