Category: Currency

Rupee at 1-week high of 65.01 as dollar slides on trade war worries

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The rupee today made an impressive recovery from early losses to close 10 paise higher at a one-week high of 65.01 against the US currency which suffered losses in global markets on intensifying trade war worries.

Fear and panic gripped the currency market sentiment initially after US President Donald Trump decided to slap tariffs on China.

Weighed down by heavy dollar demand, the home currency plunged to an intra-day low of 65.21 before staging a rebound to a high of 64.97.

The rupee finally settled with a gain of 10 paise at 65.01, a level last seen on March 16, when it had closed at 64.94.

“US Dollar’s weakness following trade war fears and FII demand for rupee especially for bonds, ensured that rupee remained unscathed despite equity market sell off. Bond yields will continue to be in focus ahead of RBI rate decision as well as release of auction calendar, both early next month,” Anand James, Chief Market Strategist at Geojit Financial Services said.

The broad based US dollar’s weakness also supported the recovery momentum. The US Dollar Index, which measures the greenback’s strength against a basket of currencies, was down 0.28 per cent at 89.22.

The Japanese yen hit a 16-month high against the dollar today on concerns over rising global trade tensions triggered a bout of investor risk aversion.

Global crude prices rose today after the Saudi energy minister said OPEC would need to keep coordinating supply cuts with non-member countries, including Russia into 2019. Brent crude was trading at USD 69.01 a barrel in early Asian trade.

Meanwhile, local bourses with benchmark indices hitting five-month low as trade war fears escalates.

The flagship Sensex dropped almost 410 points to end at 32,596.54, while Nifty lost 116.70 points at 9,998.05.
Bond yield fell for the third session to hit five-week low ahead of the April-September bond auction calendar. The 10-year bond yield ended at 7.557 against previous close of 7.563. Bond yields and prices move in opposite directions.

The RBI, meanwhile, fixed the reference rate for the dollar at 65.1333 and for the euro at 80.3354.

In the cross currency trade, the rupee closed at 91.9552 from 92.0630 against the pound sterling. It strengthened against the euro to 80.3354 from 80.3713 earlier.

The Indian unit also edged higher against the Japanese yen to conclude at 62.13 per yens from 62.44 yesterday.
In forward market, the benchmark six-month premium payable in August moved up to 116-118 from 115.50-117.50 paise and the far-forward February 2019 contract also edged higher to 232-234 paise from 230.50-232.50 paise yesterday.

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Rupee falls 8 paise against US dollar in early trade

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The rupee depreciated by 8 paise to 65.19 against the US dollar in early trade today on sharp losses in global equity markets after US President Donald Trump imposed $60 billion of tariffs on Chinese imports.

Trump yesterday directed the US trade representative to level tariffs on about $60 billion worth of Chinese imports after a seven-month investigation into the intellectual property theft, which has been a longstanding point of contention in US-China trade relations.

Yesterday, the rupee had ended 10 paise higher to close at 65.11 against the US currency on foreign fund inflows after the US Federal Reserve stuck to its outlook of three rate hikes this year.

Meanwhile, on a net basis, foreign institutional investors (FIIs) bought shares worth Rs 161.11 crore, while domestic institutional investors (DIIs) made purchases worth Rs 409.89 crore yesterday, provisional data showed.

The benchmark BSE Sensex cracked below the 33,000-mark by plunging 471.44 points, or 1.42 per cent, to 32,534.83, while the broader NSE Nifty dipped below the 10,000 in opening trade.

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Bitcoin is now cheaper by $10,000 from its all-time highs

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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It seems the cryptocurrency market is crashing as fast as it rose.

The most prominent of cryptocurrencies, Bitcoin, is now trading at nearly $8,200 per unit after touching its near four-month lows of $7,676. Bitcoin touched its peak on December 11, 2017 when it traded at $17,549 a unit.

Not only this, the entire cryptocurrency market is losing sheen and has lost over $60 billion in value in just one day, CNBC reported.

According to Coinmarketcap.com, the market value of all the virtual currencies stood at $310.4 billion on Thursday, slipping from Wednesday’s value of $372.9 billion.

The cryptocurrency market has been witnessing a precipitous fall due to multiple reasons.

Here are four key factors which have pulled down the cryptocurrency market.

A trustee of the bankrupt Japanese cryptocurrency exchange Mt.Gox went on an alleged selling spree.

The exchange closed in 2014 and filed for bankruptcy after losing close to 850,000 bitcoins. Allegations are that one of the trustees has been allegedly selling large amounts of bitcoins illegally.

Also, Google is planning to ban cryptocurrency-related advertising on its platforms, including initial coin offerings (ICOs), wallets and trading advice.

The third reason is the recent spate of scams in the initial coin offering (ICO) space of cryptocurrencies that are being reported. CNBC had earlier reported on how scammers looted over $2 million in cryptocurrencies after carrying out a fake ICO.

Lastly, regulators worldwide are introducing stricter norms and have been taking a tougher stance on the sector.

The US Commodity Futures Trading Commission (CFTC) summoned cryptocurrency exchange Bitfinex, and Tether, a digital coin company, last year.

Even in India, the Reserve Bank of India (RBI) has time and again cautioned investors against these currencies. The Income Tax department, too, has issued noticed to some Bitcoin investors in the country.

In his budget speech of 2018, Finance Minister Arun Jaitley reiterated the government’s advice to investors of staying away from cryptocurrencies.

He further said that the government will release stricter regulatory norms and methods to catch hold of the cryptocurrency traders.

The United Kingdom and Japan too have also announced similar actions.

Bank of England Governor Mark Carney has called for greater regulation of cryptocurrencies. Earlier this month, Japanese regulators issued punishment notices to several cryptocurrency exchanges and forced some to halt business.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow