We might see a global meltdown of the US dollar or we controlled devaluation of the US currency: either way global economy is doomed.
Sustained month-end demand from banks and importers weighed.
Saudi Arabia said on Sunday that as many as 1,301 people died during the Hajj pilgrimage, with 'numerous cases' due to heat stress and 'unauthorised' trips accounting for over four out of five of the deaths, CNN reported.
Continued demand for the American unit from importers and the greenback's persistent gains against other Asian currencies put pressure on the rupee
Foreign investors have pulled out a massive Rs 22,000 crore from Indian equities so far this month, due to uncertainty surrounding the outcome of the Lok Sabha elections and outperformance of Chinese markets.
On Tuesday, the rupee had gained 10 paise to close at 66.52.
Delhi's appeasement strategy may now translate as more mega arms deals with the US, generating substantial business and job creation in the American economy. Make no mistake, Americans will use it to pressure India, predicts Ambassador M K Bhadrakumar.
Adani Green Energy Ltd, the renewable energy arm of billionaire Gautam Adani's conglomerate, plans to raise $409 million through US dollar-denominated bonds to repay a debt obligation falling this year. In a regulatory filing, the company said the bond will have a door-to-door tenor of 18 years. The proceeds will be used to redeem the $500 million 6.25 per cent senior secured notes due 2024, it said adding these notes were issued on June 10, 2019.
Responding to questions about the economic crisis in the United States, the prime minister said: "There is a temporary setback and temporary questioning, about relevance of the American model, but I have seen these things much before."
Profits of India's top listed companies have been growing at a faster pace than those of their American peers, but when it comes to revenue growth, the order has reversed recently. The combined net profit of the S&P 500 companies was up 14.1 per cent year-on-year (Y-o-Y) during the trailing 12 months (TTM) ended December 2023, as against 17.4 per cent profit growth logged by the BSE 500 companies in the same period. This is the second consecutive year of faster profit growth for the BSE 500 companies.
In worldwide trade, the US dollar retreated from its recent multi-year highs to trade subdued against major rival currencies
Lower crude oil prices and a rally in domestic equities restricted the losses to some extent, forex dealers said. At the interbank foreign exchange market, the domestic currency opened weak at 79.50 per dollar.
Gold prices tumbled by Rs 3,350 to Rs 72,300 per 10 grams in the local market in New Delhi on Tuesday amid subdued demand by jewellers after the government announced the customs duty cut on the yellow metal and silver to 6 per cent.
The Chinese yuan has the potential to be an alternative to the US dollar and help create a multi-currency global reserve system, says an Asian Development Bank report.
The rupee depreciated by 9 paise and settled at its all-time low level of 83.13 against the US dollar on Wednesday, weighed down by a surge in crude oil prices and strong American currency. Forex traders said the Indian rupee depreciated as the US dollar rose to the highest levels in six months. Moreover, elevated crude oil prices also weighed on rupee.
Neeraj Gambhir of ICICI Bank says that bond prices are surging due to auction and the Fed's move.
Domestic air passenger traffic grew 5.1 per cent year-on-year to an estimated 138.9 million in May and was significantly higher by around 14 per cent than pre-Covid levels, credit ratings agency Icra said on Thursday. Icra also said the outlook on the Indian aviation industry is stable amid the continued recovery in domestic and international air passenger traffic with a relatively stable cost environment and expectations of the trend continuing in FY2025.
'India represents one of the top opportunities with robust growth, solid fundamentals, and openness to foreign investment.'
The dollar index surged to multi-year high.
The rupee had depreciated by 13 paise to end at 67.20.
The US dollar surged to fresh one-year high after the Fed chief's testimony to the US Senate on Wednesday bolstered the expectations of interest rate hikes, though gradually.
The Nifty IT index, data shows, has outperformed the markets in each of the last four election years post the result. announcement.
India's foreign exchange reserves increased to $604 billion as on December 1, surpassing the $600 billion mark after a gap of about four months. The forex reserves were last above the $600 billion mark on August 11 this year. "India's foreign exchange reserves stood at $604 billion as on December 1, 2023.
A lower opening in the domestic equity market put pressure on the rupee.
Brazil and other developing nations are growing anxious about the expected withdrawal of stimulus in the United States
The fact that the US dollar has become the world's preferred reserve currency is now the core of global financial crisis, says Mohan Guruswamy.
One of the key factors contributing to the decline in the value of the rupee against the US dollar is the tightening yield spread between the 10-year India government bond and the US government bond. The yield on 10-year Indian government bonds is now only 295 basis points higher than that of US 10-year treasury bonds, the lowest since January 2007. Lower spread means lower incentive for foreign investors to invest in rupee assets, which adversely affects foreign capital inflows into the country and weighs on the rupee-dollar exchange rate.
A potential risk to the rupee's appreciation trajectory lies in the event of a delay in the Federal Reserve's rate cut cycle, particularly if core inflation in the US remains elevated.
Among the 30 Sensex companies, Larsen & Toubro, Power Grid, NTPC, State Bank of India, Reliance Industries and HDFC Bank were the biggest laggards. Sun Pharma and Nestle were the only gainers.
Weakness in euro against the dollar weighed on the rupee.
Market participants attribute the stability to the Reserve Bank of India's timely intervention in the foreign exchange market, both in terms of selling and buying dollars.
It hovered in a range of 63.57 and 63.70.
The Rupee on Thursday breached the 49-mark against the US dollar and fell by 52 paise in early trade following increased capital outflow by foreign funds due to melting stock markets.
Gold has always served as a hedge against inflation and declining US dollar. When investors realise that their money is losing value they will start positioning their investments in a hard asset that has traditionally maintained its value. The reason gold benefits from a declining US dollar is because gold is priced in US dollars globally. Whenever there is news that hints at some type of uncertainty, investors will often buy gold as a safe haven & as diversifying investment.
The latest flashpoint in West Asia has derailed India's preliminary plans to resume crude oil imports from Iran, officials said. In January, officials of the Ministry of Petroleum and Natural Gas had told Business Standard that the government had been studying proposals for the same, given that India was trying to expand sources of imports. "We are always monitoring the situation when it comes to crude flows.
The Indian rupee, which has depreciated 1.1 per cent so far in August, is expected to decline further on the back of a strengthening US dollar and a weakening Chinese yuan, according to a Business Standard poll of analysts. The Indian rupee hit an all-time low recently, closing at 83.15 per dollar. Five of the 10 respondents said the Indian currency might touch 83.5 per dollar in August itself, while others said the worst could be over.
The rupee had gained two paise to close at one-month high of 62.14 against the dollar in Tuesday's trade.
As many as 86 per cent of senior business executives have deployed artificial intelligence (AI) to enhance revenue streams or create new ones, said a report by Tata Consultancy Services (TCS) on Wednesday. As many as 69 per cent of businesses are more focused on using AI for innovation and increasing revenue than on improving productivity and optimising cost, said the 'TCS AI for Business Study'.
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