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Time of India
14 hours ago
- Business
- Time of India
US strikes on Iran expected to weaken rupee and bond yields
Agencies Live Events (You can now subscribe to our (You can now subscribe to our ETMarkets WhatsApp channel Mumbai: Indian bond yields and the rupee are expected to weaken following Sunday's unexpected US strikes on Iranian nuclear sites, potentially leading to a shutdown of the Strait of Hormuz that is crucial for crude oil supplies to New anticipate the 10-year government security (G-sec) yield to open 3-4 basis points higher than Friday's close of 6.31%, according to CCIL data. The Indian rupee is likely to open around 86.80 per US dollar Monday, about 22 paise weaker than its previous close of 86.58/$ rupee had rebounded on Friday after five consecutive sessions of decline. However, reports of US strikes on Iranian nuclear sites have set the stage for a reversal of that recovery. Further overnight escalation by Iran is expected to drive oil prices higher, which could exert upward pressure on bond would also keep an eye out for the intensity of intervention by the Reserve Bank of India (RBI) in the currency spot market, traders said. "Rupee is expected to open around 86.80/$1 levels, with a good possibility of the currency weakening towards 87/$1 if oil prices go higher," said Ritesh Bhansali, deputy CEO at Mecklai Financial crude futures have surged nearly 18% since June 10, reaching a five-month high of $79.04 on Thursday, according to Reuters. Rising crude prices pose inflationary risks for India, a major importer of oil. "We know yields will open higher on Monday, but we will be able to take a proper position only after assessing oil prices early on Monday," said Vijay Sharma, senior executive VP at PNB Gilts The US strike followed President Donald Trump's earlier statement on Friday that he would delay action against Iran by a week. That announcement had led to a 14 paise appreciation in the rupee, which closed at 86.58 per dollar."Yields would likely open a bit higher due to the unexpected attack, especially after the 'two weeks pause' comment by Trump which triggered the rally on Friday. This rally may unwind, and we can see yields of the most traded 2034 paper around 6.40% levels," said Gopal Tripathi, head of treasury at Jana Small Finance Bank . The 2034 paper had closed at 6.37% on Friday, according to CCIL.
Time of India
4 days ago
- Business
- Time of India
Rupee hits three-month low amid rising oil prices and Middle East tensions
"Since the rupee is weakening every day, exporters are cautiously hedging some amount everyday, and not all at once," Bhansali said. The Indian rupee hit a three-month low of 86.89 against the dollar due to concerns over the Iran-Israel conflict and rising oil prices, settling slightly higher at 86.72 following suspected RBI intervention. Elevated Brent crude prices at $77 a barrel are adding pressure, with traders anticipating continued rupee weakness amid Middle East tensions and cautious exporter hedging. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Mumbai: The Indian rupee touched a three-month low at 86.89 to a dollar intra-day Thursday, stretching weekly losses to nearly a percentage point, on lingering concerns of a protracted Iran-Israel conflict that could cause oil prices to harden toward 52-week local monetary unit ended slightly higher at 86.72, likely on central bank interventions, traders said, as stocks whipsawed through a volatile trading day, marked by the unpredictability of the expiry of weekly contracts on the biggest bourse."All of emerging market country currencies are on a weakening bias due to the war and as long as oil prices are elevated, the rupee is expected to be under pressure," said Ritesh Bhansali, deputy CEO, Mecklai financial crude oil prices remained elevated at $77 per barrel Thursday, amid few signs of a truce in the Middle rupee levels seen Thursday have been the lowest since mid March, LSEG data showed. The rupee had closed at 86.48 per dollar on Wednesday.A rise in crude oil prices is detrimental for inflation in India as the country is a large importer of the said the Reserve Bank of India 's (RBI) forex street presence has been rather light-footed despite the volatile week, and that the central bank has been selling dollars from its stockpile in a calibrated manner to stem the losses for the rupee and prevent imported inflation "Today (Thursday), RBI was present via state-run banks and offered dollars above the 86.80 levels," a trader from a public sector bank said. Traders expect the weakening bias to continue amid tensions in West Asia."Since the rupee is weakening every day, exporters are cautiously hedging some amount everyday, and not all at once," Bhansali said.
Economic Times
4 days ago
- Business
- Economic Times
Rupee hits three-month low amid rising oil prices and Middle East tensions
"Since the rupee is weakening every day, exporters are cautiously hedging some amount everyday, and not all at once," Bhansali said. The Indian rupee hit a three-month low of 86.89 against the dollar due to concerns over the Iran-Israel conflict and rising oil prices, settling slightly higher at 86.72 following suspected RBI intervention. Elevated Brent crude prices at $77 a barrel are adding pressure, with traders anticipating continued rupee weakness amid Middle East tensions and cautious exporter hedging. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Mumbai: The Indian rupee touched a three-month low at 86.89 to a dollar intra-day Thursday, stretching weekly losses to nearly a percentage point, on lingering concerns of a protracted Iran-Israel conflict that could cause oil prices to harden toward 52-week local monetary unit ended slightly higher at 86.72, likely on central bank interventions, traders said, as stocks whipsawed through a volatile trading day, marked by the unpredictability of the expiry of weekly contracts on the biggest bourse."All of emerging market country currencies are on a weakening bias due to the war and as long as oil prices are elevated, the rupee is expected to be under pressure," said Ritesh Bhansali, deputy CEO, Mecklai financial crude oil prices remained elevated at $77 per barrel Thursday, amid few signs of a truce in the Middle rupee levels seen Thursday have been the lowest since mid March, LSEG data showed. The rupee had closed at 86.48 per dollar on Wednesday.A rise in crude oil prices is detrimental for inflation in India as the country is a large importer of the said the Reserve Bank of India 's (RBI) forex street presence has been rather light-footed despite the volatile week, and that the central bank has been selling dollars from its stockpile in a calibrated manner to stem the losses for the rupee and prevent imported inflation "Today (Thursday), RBI was present via state-run banks and offered dollars above the 86.80 levels," a trader from a public sector bank said. Traders expect the weakening bias to continue amid tensions in West Asia."Since the rupee is weakening every day, exporters are cautiously hedging some amount everyday, and not all at once," Bhansali said.
Time of India
09-05-2025
- Business
- Time of India
Rupee faces worst single-day loss since February amid growing border conflict
Agencies Live Events (You can now subscribe to our (You can now subscribe to our ETMarkets WhatsApp channel Mumbai: The rupee on Thursday logged its worst single-day loss since February 2023, its pace of retreat accelerating toward the late afternoon, over mounting concerns the border conflict with Pakistan could linger and engulf a wider geography than anticipated rupee lost more than a percentage point - equivalent to 90 paise - through a single trading session to end at 85.71 per dollar Thursday, LSEG Data showed. It had lost about 40 paise Wednesday after Operation Sindoor struck deep at the heart of the Pakistan-sponsored terror establishments to avenge the deaths of innocent tourists in J&K two weeks rupee's trading amplitude mirrored the volatility in other financial assets. It traded in the range of 84.52/$1 to 85.79/$1."Dollar demand spiked after about 2pm and there was a lot of short covering seen from traders. Oil companies were also buying and the dollar index also saw an uptick, which acted as headwinds for the rupee," said Dilip Parmar, currency analyst, HDFC Reserve Bank of India (RBI) likely intervened lightly, but even the central bank's support wasn't sufficient to shield the local weakening of the rupee past 85.50 levels posed a good opportunity for exporters to hedge, traders said."Many exporters booked their forwards today," said Ritesh Bhansali, deputy CEO, Mecklai Financial forward premiums also jumped with the one-year implied yield rising 16 basis points to a near one-month high of 2.34%, according to LSEG data. Geopolitical uncertainty could weigh on the rupee, pushing it to levels of 86.50/$1 to 87, traders on the 10-year benchmark government security closed at 6.39%, four basis points higher than the previous close. The bond traded in the yield range of 6.31% to 6.40% on Thursday, CCIL data showed. Bond yields started hardening around 2 pm, too, dealers said. They expect yields to rise 3 to 5 basis points if the uncertainties continue.'When the markets opened today, they were calm in the first few hours because retaliation was measured. But looking at what we are seeing from Pakistan, yields went up sharply in the second half of the session,' said a senior trader from an insurance company. Some traders are, however, seeing this as a buying opportunity, as prices have reduced, with the new 10 year — the 6.33% GS 2025 — paper even trading at a discounted price.'We are likely to see more of such reactions, and prices will likely fall further. But I do not see this escalation going on for a long time,' said Mataprasad Pandey, vice president, Arete Capital Services. 'Hence, this presents a good buying opportunity, as when yields soften, there will be good profits.'
Mint
08-05-2025
- Business
- Mint
Rupee falls 89p, the most since Feb 2023, as India-Pak tensions rise
Mumbai: The Indian rupee fell nearly 1% on Thursday amid rising tensions between India and Pakistan. The domestic currency opened at 84.61 and moved between an intra-day high of 84.52 and a low of 85.77 against the dollar. It closed 89 paise lower at 85.72 after ending at 84.83 against the dollar on Wednesday, marking the worst day since 6 February 2023. Both the currency and stock markets declined on Thursday after India confirmed it had targeted air defence radars and systems at a number of locations in Pakistan, while Pakistan's military said it had shot down 25 Indian drones. The rise in dollar index also aided in the rise of dollar-rupee. The dollar index, which gauges the dollar's strength against a basket of six currencies, was trading higher by 0.46% at 100.07. 'With hostilities increasing and if RBI does not step in, we can see the rupee reach even 87 tomorrow with a more than 1 rupee movement seen today, 'said Anil Kumar, head of treasury and executive director at Finrex Treasury Advisors LLP. Meanwhile, the Reserve Bank of India (RBI) was found intervening in the market at different levels over the last two days to reduce volatility and is expected to be active in the coming days. In March, the rupee appreciated sharply from 87.5 to 85 in just 20 days owing to a correction in the dollar index. The dollar gauge has corrected by 7.8% since January this year. 'Importers have hedged reasonably well when the rupee dipped from 87.5 to 85. But exporters had missed the bus when the rupee appreciated over the last 2 months. But they are now in the market hedging their positions,' said Ritesh Bhansali, deputy chief executive officer, Mecklai Financial Services Pvt Ltd. Dilip Parmar, research analyst at HDFC Securities, said the market sentiment remains subdued due to persistent geopolitical anxieties and the potential for foreign fund outflows. 'The USDINR spot rate faces resistance at ₹ 86.40 and finds support at ₹ 85," he said. 'The bias has shifted to weak following the rise in conflict.'
