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Informist, Monday, Mar. 10, 2025

By Gowri Lakshmi

MUMBAI – The rupee settled at a one-week low against the dollar on Monday as banks purchased the greenback on behalf of importers, dealers said. The rupee also fell tracking the offshore Chinese yuan, they said. 

"The chinese yuan has impacted all the regional currencies, and it weighed on rupee as well. Importer buys were persistent but panic-buying wasn't there," said a dealer at a state-owned bank. "If it (rupee) inched toward 87.40 (a dollar), panic would have set in." 

After moving in a range of 20 paise, the rupee ended at 87.3300 against the greenback, the lowest since last Monday. The Indian unit fell 0.5% against the dollar on Monday, faring the worst among its regional peers. Other Asian currencies fell between 0.2% and 0.5% against the US currency.

The rupee opened sharply lower at 87.2800 a dollar, down over 40 paise from its previous close. The rupee slumpd at open, tracking a fall in the offshore Chinese yuan, dealers said. The Chinese yuan fell 0.2% against the greenback on Monday after China's inflation print for last month missed estimates. China's consumer price index fell the sharpest in 13 months and declined 0.7% on year in February, reversing a 0.5% gain in January. Economists in a Reuters poll had forecast a 0.5% decline. Core CPI fell 0.1% in February, the first fall since January 2021. 

The dollar index continued to fall on Monday after rising breifly as investor sentiment turns jittery amid concerns about the growth of the US economy and uncertainty about President Donald Trump's trade policies. The index declined after jobs data showed non-farm payrolls in the US increased by 151,000 last month against a forecast of a rise of 160,000 jobs in a Reuters poll. The unemployment rate edged higher to 4.1% in February from 4.0% a month prior. 

Due to the risk-averse sentiment among investors, other safe-haven currencies, including the Japanese yen and the Swiss franc, strengthened against the US currency, weakening the dollar index further, dealers said. The dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 103.66 at 1530 IST, compared to 103.91 on Friday and 104.14 on Thursday. 

While a weaker dollar index would usually support the Indian rupee, dealers said continued net foreign fund outflows from Indian markets have kept the rupee under pressure, and not allowed it to reap the benefits of a weaker dollar index.

The rupee further came under pressure during the day as banks purchased the greeback on behalf of importers, dealers said. Importers, including oil marketing companies, bought dollars to meet their year-end payment requirements, dealers said. 

The rupee fell to the day's low of 87.3550 a dollar as some banks also purchased the greenback on behalf of foreign portfolio investors, who exited the Indian stock market. The Nifty 50 and the BSE Sensex ended 0.4% and 0.3% lower, respectively. So far in 2025, overseas investors have net sold $15.25 billion worth of shares from the domestic equity market.

As the rupee came under pressure, some dealers speculated that the Reserve Bank of India might have stepped in with dollar sales to prevent the rupee from falling more. 

FORWARDS 

Premiums on dollar/rupee forward contracts ended higher on Monday as banks purchased the greenback for forward delivery on behalf of importers, dealers said. A rise in the net liquidity injected by the central bank, which is a proxy for systemic liquidity conditions, also pushed premiums higher, they said. 

Premiums also inched higher as some banks took advantage of the arbitrage opportunity between the onshore and offshore dollar/rupee non-deliverable forward levels, dealers said. A rise in the benchmark 10-year US Treasury yield limited the upward movement in forward premiums, dealers said. The yield on the benchmark 10-year US Treasury note rose 3 basis points to 4.32% on Friday. Forwards of a currency pair are reflective of the interest rate differential between the two countries.

At 1530 IST, the premium on the one-year exact-period dollar/rupee forward contract was 188.96 paise, against 183.93 paise on Friday. On an annualised basis, the premium was at 2.16%, against the previous close of 2.12%.

OUTLOOK

On Tuesday, the rupee will take cues from the movement of the dollar index and the offshore Chinese yuan, dealers said. It will also take cues from the movement in crude oil prices, they said. Investors will closely track any tariff-related news from Washington.

Importers are likely to continue demanding dollars to meet their year-end payment obligations. Some importers may also purchase the greenback, fearing a sharp fall in the Indian unit, dealers said. This is expected to keep the rupee down, dealers said. 

However, they expect some banks to step in with dollar sales, likely on behalf of the RBI, to prevent the rupee from falling sharply and to curb excessive market volatility. 

India Rupee - World FX: Yen up on safe-haven demand; dollar index stays weak

MUMBAI – The Japanese yen was up 0.5% against the dollar Monday on safe-haven-asset demand. Heightened concerns over the growth of the US economy and the ambivalent trade policy of President Donald Trump has driven investors to move their funds to safe-haven assets such as the yen.

The dollar index continued to wallow during European trade. On Sunday, Trump declined to predict whether the US could face a recession amid concerns in the stock market emanating from his tariffs and trade policies. "There is a period of transition, because what we are doing is very big," Trump said. "We're bringing wealth back to America. It takes a little time, but I think it should be great for us."

Further, US jobs data came in weaker than expected Friday, increasing concerns about the state of the world's largest economy. Non-farm payrolls increased by 151,000 last month against a forecast of a rise of 160,000 in a Reuters poll. The unemployment rate also edged higher to 4.1% in February from 4.0% a month prior.

At 1415 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 103.92, compared to 103.91 Friday and 104.14 Thursday. The Swiss franc was up 0.2% against the greenback.

The euro was up 0.2% after industrial output in Germany, the bloc's largest economy, rose by 2.0% in January, higher than the forecast of a 1.5% rise in a Reuters poll. The euro got further support after the results of a survey released Monday showed that morale among investors received a boost in March, with rising economic expectations. The Sentix index in the European Union shot up to (-)2.9 in March from (-)12.7 in the previous month. It also beat expectations of (-)8.4 in a Reuters poll.

The Australian dollar was up 0.4% and the New Zealand dollar was up 0.6% against the greenback. However, gains in the currencies were capped after China's CPI fell 0.7% on year last month, reversing a 0.5% gain in January. Economists had forecast a 0.5% decline in a Reuters poll. Core CPI fell 0.1% in February, the first fall since January 2021. Meanwhile, China's Producer Price Index eased to 2.2% last month from 2.3% fall a month ago. Any change in the Chinese economy directly impacts the currencies of Australia and New Zealand due to their close bilateral trade relations.

The pound sterling was down 0.1%. The Canadian dollar was up 0.1% against the greenback Monday. Earlier in the day, Mark Carney, former governor of the Bank of Canada and the Bank of England, won the race to replace Justin Trudeau as Canada's prime minister after being elected leader of the Liberal Party. After his win, Carney told supporters, "America is not Canada. Canada will never ever be part of America in any way, shape, or form." It was in response to Trump's repeated calls to make Canada the 51st state of the US.

On Friday, Trump criticised Canada's tariffs on dairy and lumber and said his team would soon impose reciprocal tariffs on Canadian products. "Canada has been ripping us off for years on tariffs for lumber and for dairy products," Trump told reporters at the Oval Office. "They will be met with the exact same tariffs, unless they drop it, and ... we may do it as early as today or we'll wait till Monday or Tuesday."  (Gowri Lakshmi)

India Rupee: Remains sharply down; fall in dlr index, FX inflows limit fall

MUMBAI – The rupee remained sharply lower against the dollar due to dollar purchases by importers who feared the rupee might fall further, dealers said. The Indian currency fell sharply in early trade Monday, tracking losses in the offshore Chinese yuan. 

The rupee came under pressure and was dragged to a near one-week low of 87.3150 a dollar in early trade Monday due to a fall in the Chinese yuan, dealers said. The Chinese yuan was down 0.4% against the US currency after weaker than expected inflation figures. The consumer price index in China fell 0.7% in February, the sharpest in 13 months.

"There is buying pressure, but selling has been going on since morning mostly for FPI flows," a dealer with a foreign bank said. Some banks sold dollars on behalf of foreign portoflio investors, which limited the fall in the rupee, dealers said. At 1303 IST, the Nifty 50 and the BSE Sensex were up 0.3% and 0.2%, respectively. The rupee touched a high of 87.1550 a dollar earlier in the day, likely due to foreign fund inflows.

The fall in the Indian currency was also limited due to a weaker dollar index, dealers said. At 1307 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 103.86, compared to 103.91 on Friday and 104.14 on Thursday. 

The dollar index declined after data showed that non-farm payrolls in the US increased by 151,000 last month, against a forecast of a rise of 160,000 jobs in a Reuters poll. The unemployment rate edged higher to 4.1% in February from 4.0% a month prior. 

For the rest of the day, the rupee is seen moving in a range of 87.00-87.40 against the dollar. Dealers see strong immediate technical support for the Indian unit at 87.40 a dollar.  (Gowri Lakshmi)

India Rupee: Technical Levels for rupee - Mar 10

MUMBAI – At 1142 IST, the rupee was at 87.2000 per dollar. At 0900 IST, the rupee was at 87.2800 a dollar, against the previous close of 86.8725. Following are the key support and resistance levels for the rupee as provided by leading banks and brokerages:

(Sourabh Kumar and Gowri Lakshmi)

India Rupee - Asia FX:Most units fall tracking yuan; South Korea won dn 0.4%

MUMBAI – Most Asian currencies were down against the dollar Monday despite a fall in the dollar index. The Asian units fell tracking a fall in the offshore Chinese yuan. The yuan was lower after China's consumer price index missed expectations and fell at the sharpest pace in 13 months in February.

China CPI fell 0.7% on year last month, reversing a 0.5% gain in January. Economists had forecast a 0.5% decline in a Reuters poll. Core CPI fell 0.1% in February, the first fall since January 2021. Meanwhile, producer price index eased to 2.2% last month from 2.3% fall a month ago. 

A fall in the dollar index, however, limited the downward movement in most Asian currencies. At 0934 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 103.84 compared to 103.91 on Friday and 104.14 on Thursday.

Data on Friday showed that while the number of new jobs in the US picked up in February, the figures were lower than expected. Non-farm payrolls increased by 151,000 last month against a forecast of a rise of 160,000 jobs in a Reuters poll. The unemployment rate edged higher to 4.1% in February from 4.0% a month ago. 

The dollar index was down as confidence of investors in the US economy dwindled, strengthening other safe-haven currencies such as the Swiss franc and the Japaese yen. However, US Federal Reserve Chair Jerome Powell on Friday hinted that the Fed may not cut rates immediately and is awaiting 'grater clarity' on President Donald Trump's policies. "The Fed is focused on separating the signal from the noise as the outlook evolves. We do not need to be in a hurry, and are well positioned to wait for greater clarity," Powell said.

The South Korean won was down 0.4% against the dollar as the country's manufacturing production slumped amid growth concerns. Data on Sunday showed that the manufacturing index fell 4.2%, the sharpest downward movement since July. Meanwhile, on Monday, South Korea's acting President Choi Sang-mok ordered authorities to actively communicate with Washington to resolve any misunderstanding over tariffs after Trump recently singled out South Korea's high tariffs on US imports. 

The Malaysian ringgit was down 0.3% against the US unit. Malaysia's central bank posted a rise in its foreign reserves, which stood at $118.3 billion as on Feb. 28, data on Sunday showed. The Indonesian rupiah and the Taiwan dollar were both down 0.2% against the US currency.

The Philippines peso was down 0.3% against the greenback. However, losses in the currency were capped after a Philippines central bank official hinted that it would continue to hold rates and instead pursue further reductions in bank reserve requirements to strengthen economic growth, reports said. Further, data on Monday showed that the country's dollar reserves hit a three-month high in February, which stood at $106.7 last month, the highest since November. 

The Thai baht was down 0.1% against the US unit after Thailand's inflation in February slowed from the previous month and remained within the central bank's range, data on Friday showed. The headline inflation eased to 1.08% on year in February from 1.32% a month ago. The core CPI was up 0.99%, slightly above the forecast of 0.90% in a Reuters poll.  (Gowri Lakshmi)

India Rupee: Slumps tracking fall in yuan post weaker-than-view China CPI

MUMBAI – The rupee slumped against the dollar, tracking weakness in the offshore Chinese yuan, which was down over 0.2% against the dollar in early trade Monday, dealers said. Importers also rushed to purchase the greenback, which further pushed the Indian currency down, dealers said. The rupee was down 0.5% against the US currency in early trade.

China's consumer price index missed expectations in February, falling the sharpest in 13 months. The CPI fell 0.7% on year last month, reversing a 0.5% gain in January. Economists in a Reuters poll had forecast a 0.5% decline. Core CPI fell 0.1% in February, the first fall since January 2021. 

"The Chinese data is a very bad news for all EM (emerging markets). The data shows the prices haven't cooled but the consumer spending has reduced, which hints that all the stimulus package they introduced had little to no real impact," said a dealer at a state-owned bank.

The rupee also came under pressure as most other Asian currencies fell 0.1-0.6%, with the South Korean won being the worst hit. However, a broadly weak dollar index lent some support to the rupee, dealers said. 

Data on Friday showed that while the number of new jobs in the US picked up in February, the figure was lower than expected. Non-farm payrolls increased by 151,000 last month against a forecast of a rise of 160,000 jobs in a Reuters poll. The unemployment rate edged higher to 4.1% in February from 4.0% a month prior. 

This hit investors' confidence in the US economy, strengthening other safe-haven currencies such as the Swiss franc and the Japaese yen. The Japanese yen was up 0.3% against the US dollar on Monday. 

However, Federal Reserve Chair Jerome Powell on Friday hinted that the US Fed might not cut rates immediately and was awaiting 'grater clarity' on US President Donlad Trump's policies. "The Fed is focused on separating the signal from the noise as the outlook evolves. We do not need to be in a hurry, and are well positioned to wait for greater clarity," Powell said. This limited the downside movement in the dollar index.

At 0929 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 103.84, compared to 103.91 on Friday and 104.14 on Thursday. Despite the weakness in the dollar index, dealers expect the rupee to come under pressure. "Powell had said about less rates cuts, which will likely put pressure on INR after investors weigh the interest rate differentials," said the dealer at a state-owned bank. 

During the day, the rupee is seen moving in a range of 87.00-87.40 against the dollar. Dealers see technical support for the Indian unit at 87.35 a dollar.  (Gowri Lakshmi)

India Rupee: Expected range for rupee - Mar 10

MUMBAI – Following are the expected support and resistance levels for the rupee on Monday, as forecast by leading banks and brokerages in an Informist poll:

(Sourabh Kumar and Pratiksha)

End

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Edited by Avishek Dutta

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