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SPOT 1-YR FWD 1-YR FWD 1-MONTH FUTURES
PREMIUM ABSOLUTE
(Rs)
Last 64.1825-64.1925 ---------- --------- 64.3325-64.3350
Open 64.1600-64.1700 ---------- --------- 64.3000-64.3025
High 64.2000-64.2100 ---------- --------- 64.3550-64.3575
Low 64.1100-64.1200 ---------- --------- 64.2525-64.2550
(Rs)
Prev 63.8700-63.8800 7.04-7.09% 4.34-4.36 64.1050-64.1075
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9:15AM//USD/INR opens at over 7-week high after PBoC devalues currency
Dollar/rupee opened at over seven-week high Tuesday after the People's Bank of China devalues its currency, Yuan, by almost 2% against the US dollar to levels last seen three years ago in a bid to boost the economy, dealers said.
"PBoC devalued its currency, which should have an impact on our currency as well," said a dealer with a private-sector bank.
At 9:15AM, the dollar/rupee traded at Rs 64.19/$1 compared to previous close of Rs 63.87/$1 and Rs 64.16/$1 at open.
A weaker yuan could threaten other economies in the region that compete with Chinese exports, and the move sent other currencies in Asia lower. A weaker yuan could encourage other central banks in the region to also devalue their currencies to stay competitive.
Chinese exports slumped 8.3% in July, the biggest drop in four months and far worse than expectations for a 1% fall. Exports to the European Union fell 12.3% in July while those to the United States dropped 1.3%.
The People's Bank of China says the move was a one-off to align onshore and offshore rates in another step toward deregulation of the foreign exchange market. The PBOC also says that the yuan's strength relative to other currencies provided room for adjusting its value.
Meanwhile, the currency pair was also supported on comments from the Federal Reserve Bank of Atlanta President Dennis Lockhart as he said that the decision to hike rates should come soon.
"I think the point of 'liftoff' is close," Lockhart said in prepared remarks for an address to the Atlanta Press Club. "The economy has made great gains and is approaching an acceptable normal, conditions are no longer extraordinary."
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8:55AM//USD/INR seen up as PBoC devalues Yuan to boost economy; Outflows eyed
Dollar/rupee may open up Tuesday after the People's Bank of China devalues its currency Yuan as it allowed the yuan to depreciate almost 2% against the US dollar to levels last seen three years ago, dealers said.
"Capital flight can be seen from our markets after the Yuan was devalued," said a dealer with a public sector bank.
Dollar/rupee may open around Rs 64.05-64.10/$1 Tuesday compared with previous close of Rs 63.87/$1, he added.
A weaker yuan could threaten other economies in the region that compete with Chinese exports, and the move sent other currencies in Asia lower. A weaker yuan could encourage other central banks in the region to devalue their currencies to stay competitive.
Chinese exports slumped 8.3% in July, the biggest drop in four months and far worse than expectations for a 1% fall. Exports to the European Union fell 12.3% in July while those to the United States dropped 1.3%.
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8:40AM//USD/INR NDF extends gain; Dlr index extends fall to 4th-day
Dollar/rupee in the inter-bank offshore market extended gains for the second straight day Tuesday, while the dollar index extended its fall for the fourth straight day on comments from Fed officials stating that low inflation is still a concern for the world's largest economy.
The dollar index, which tracks the strength of the greenback against six major currencies, traded at 97.43 Tuesday during early Asian trades compared with 97.62 at close in New York time.
Dollar/rupee in the non-deliverable forwards market maturing in one month, traded at Rs 64.06/$1 compared to previous close of Rs 64.04/$1 and onshore spot previous close of Rs 63.87/$1.
Federal Reserve Vice Chairman Stanley Fischer said Monday that low inflation in the US, while probably restrained by temporary factors, remains a concern as the labor market nears a sweet spot.
Fischer's remarks indicate that while he is pleased with progress on employment, he may be waiting for signs inflation will start moving up toward the central bank's target.
The Federal Open Market Committee meets Sep 16-17 for a meeting at which many investors and economists expect it will raise interest rates for the first time in almost 10 years.
"Employment has been rising pretty fast relative to previous performance, and yet inflation is very low," he said in an interview to Bloomberg Television. "And the concern about this situation is not to move before we see inflation, as well as employment, returning to more normal levels."
However, the dollar failed to react to positive comments from the Federal Reserve Bank of Atlanta President Dennis Lockhart as he said that the decision to hike rates should come soon.
"I think the point of 'liftoff' is close," Lockhart said in prepared remarks for an address to the Atlanta Press Club. "The economy has made great gains and is approaching an acceptable normal, conditions are no longer extraordinary."
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