Rupee ends a tad stronger, aided by broad based interbank dollar sales
By Jaspreet Kalra
MUMBAI, Oct 16 (Reuters) -The Indian rupee closed slightly stronger on Wednesday, supported by broad-based interbank dollar sales towards the end of the session after having spent the day locked in a narrow range just shy of its all-time low.
The rupee INR=IN closed at 83.9950 against the U.S. dollar, up from its close at 84.0375 in the previous session.
The currency spent most of the session near the 84.04-84.05 levels, just shy of its all-time low of 84.0750 hit on Monday.
Dollar demand from foreign banks, likely on behalf of custodial clients, blunted the positive effects of lower oil prices and gain in most of the rupee's Asian peers, traders said.
But dollar sales picked up towards the end of the session and banks' hesitation to initiate longs on the dollar-rupee near these levels helped make room for a move lower, a trader at a state-run bank said.
The benchmark Indian equity indexes, the BSE Sensex .BSESN and Nifty 50 .NSEI, ended the day lower and have declined over 3% over the month so far.
Overseas investors have sold local stocks worth nearly $8 billion so far in October as global fund managers increased their allocation to China at India's expense.
Pressured by the outflows and elevated oil prices, the rupee weakened past 84 for the first time ever last week. But it has avoided sharper losses, supported by routine interventions by the Reserve Bank of India.
Asian currencies were up between 0.1% and 0.5% on the day, while the dollar index was a tad lower at 103.2.
"We continue to see a non-negligible risk that markets will place some "Trump hedges" by buying dollars ahead of a closely-contested U.S. election," ING Bank said in a note.
Meanwhile, India's merchandise trade deficit shrank to $20.78 billion in September from a 10-month high of $29.65 billion in the previous month.
Reporting by Jaspreet Kalra; Editing by Savio D'Souza
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
