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Informist, Friday, Mar. 28, 2025

By Pratiksha

NEW DELHI – The rupee ended sharply higher against the dollar on the last trading day of the current financial year, logging its biggest monthly gain in over six years, due to persistent dollar sales for foreign fund inflows, dealers said. "The selling (of dollars) momentum continued through the day. By letting it (rupee) appreciate this much, it seems like they (RBI) have tried to close the financial year on a good note," said a dealer at a private bank.

The Indian currency ended at an over three-month high of 85.4700 a dollar against 85.7800 on Thursday. With an appreciation of 0.4%, the rupee emerged as the best performing currency among its Asian peers. The Indian unit moved in a range of 31 paise during the day. In 2024-25 (Apr-Mar), the rupee fell 2.5% against the dollar. 

The local unit began the day on a positive note, opening sharply higher against the dollar at 85.6450 as the dollar index declined owing to concern that latest tariffs announced by US President Donald Trump may lead to a growth slowdown in the world's largest economy, dealers said. Trump Wednesday announced a 25% tariff on automobiles and certain auto parts imported into the US. 

At 1530 IST, the dollar index, which measures the strength in the dollar against a basket of six major currencies, was at 104.40, compared with 104.28 on Thursday and 104.67 on Wednesday. The index touched a low of 104.07 on Thursday. 

Shortly after opening, the Indian unit got a boost as foreign banks, including a UK-based bank, sold the greenback for foreign fund inflow into some Indian corporates, dealers said. Further, banks stepped in to sell the greenback on behalf of exporters for conversion of their foreign exchange-denominated earnings into rupees before closing their books for the financial year ending Mar. 31.

The Indian currency also recieved support from banks' dollar sales on behalf of foreign portfolio investors, looking to invest in the domestic debt market, dealers said. So far in March, FPIs have infused almost $3 billion in the debt market on expectations of a rate cut by the Reserve Bank of India's Monetary Policy Comittee in Apr. 9. 

"It is the week-end, month-end and year end as well, so of course there is a lot of selling (of dollars)," said a dealer at a foreign bank. "At the same time, FPIs seem to have returned to the market. So, it's like when it rains, it pours."

Noting the sustained rise in the Indian unit this month, traders sold dollars to trim their existing positions in favour of the US unit, which also supported the Indian unit, dealers said. "Looking at today's rise, after the inflows hit, a lot of longs (dollar positions) got cut," said a dealer at a state-owned bank. "I am not sure if this movement will continue in April as well." 

Further, the central bank remained absent from the currency market and did not intervene through dollar purchases, which also provided support to the domestic unit, dealers said. The Indian unit touched the day's high of 85.4000 a dollar.

Even after a sustainable appreciation in the rupee, the central bank has been missing in action and has not used this opportunity to fill its foreign exchange reserves. This, according to dealers, has also helped the Indian unit. The Indian currency gained almost 2.3% against the dollar in March.  

However, some banks rushed to purchase the greenback on behalf of importers, in order to take advantage of the relatively lower dollar/rupee levels, which capped gains in the local unit, dealers said. Some importers also bought the US unit to meet their month-end payment requirements, they said. 

FORWARDS

Premium on the one-year dollar/rupee forward contract erased losses and ended slightly higher as some banks bougtht dollars for forward delivery on behalf of importers, noting the sharp rise in the rupee, dealers said. 

Some banks sold the greenback for forward delivery, likely on behalf of some Indian corporates, which weighed on premiums, dealers said. Further, some banks sold dollars for forward delivery on the view that the differential between Indian and US yields may narrow going ahead as the RBI's Monetary Policy Comittee may go for a 25-bps rate cut on Apr. 9, dealers said.

At 1530 IST, the one-year forward premium was 187.27 paise against Thursday's close of 187.02. On an annualised basis, the premium was 2.19% against Thursday's 2.18%.

OUTLOOK

The currency market is closed on Monday for Id-ul-Fitr and on Tuesday for banks' annual closing of accounts. On Wednesday, the rupee will take cues from movement in the dollar index after the release of the US personal consumption expenditure price index, the Federal Reserve's preferred gauge of inflation, due later in the day, dealers said.

The rupee will also take cues from the impact of Trump's next round of tariffs, set to take effect from Apr. 2. "Next week will be a fresh start of sorts for rupee I feel. All this year-end selling (for dollars) will halt, and there are multiple things lined up as well," said a dealer at another state-owned bank. 

During the day, the rupee is seen moving in a range of 85.40-85.90 against the dollar. Dealers see technical resistance for the Indian unit at 85.40 a dollar.

India Rupee - World FX: Yen surges as core inflation accelerates in Tokyo

MUMBAI – The Japanese yen surged 0.3% against the US dollar on Friday as Tokyo's core CPI in March rose 2.4% on year, climbing higher than the estimate of 2.2% increase in a Reuters poll and accelerated from a 2.2% rise the month prior. A separate index, the core core CPI, closely watched by the Bank of Japan, rose 2.2% on year in March. 

The inflation print from Japan's capital reinforced the view of an interest rate hike by the Bank of Japan in near-term. The central bank will meet for its next monetary policy meeting on Apr. 30-May. 1.

The euro was down 0.2% against the greenback ahead of the Eurozone consumer confidence for March, due later in the day. The Gfk consumer confidence survey in Germany, the bloc's largest economy, remained broadly steady for April. The consumer sentiment index rose marginally to -24.5 from slightly revised -24.6 points in March. Analysts polled -22.7 points rise in a Reuters poll. 

Further, on Thursday European Central Bank vice-president Luis de Guindos said that a potential trade war with the US will have short-term impact on the bloc's inflation but more severe harm on the bloc's economic growth. "We believe that it will have a short-lived impact on inflation, but for growth, a trade war will be extremely detrimental," Guindos said. 

The pound sterling traded flat against the greenback. UK's retail sales rose unexpectedly by 1% in February, government data on Friday showed. The volume of goods bought rose 0.4%, against a fall forecasted by analysts in a Reuters poll. Meanwhile, another data showed the UK's GDP rose 0.1% in the quarter ended December, in line with market expectations. On year, UK's economy expanded by 1.5%. 

The dollar index declined slightly during the early European trade ahead of the US personal consumption expenditure price index, the Federal Reserve's preferred gauge of inflation, due later in the day. The dollar index hovered near its previous close as investors weighed the impact of the reciprocal tariffs and the latest automobile tariffs, set to take effect next week. 

Meanwhile, data on Thursday showed the US GDP for Oct-December expanded by 2.4%, marginally higher than analysts' estimate of 2.3% in a Dow Jones poll. Additionally, the US initial jobless claims for the week ended Saturday fell 1,000 to a seasonally adjusted 224,000, against analysts' estimate of 225,000 claims in a Reuters poll. The unemployment rate remained unchanged. 

At 1443 IST, the dollar index, which measures the strength of the dollar against the greenback was at 104.38, compared to 104.28 on Thursday and 104.67 on Wednesday. The Swiss franc was down 0.1%. 

The New Zealand dollar was down 0.4% against the greenback as investors mulled over the impact of higher tariffs on global trade. Tracking losses in the New Zealand currency, the Australian dollar was down 0.1% against the US unit. Any change in the New Zealand economy directly impacts the Australian currency due to their close bilateral trade relations. 

The Canadian dollar was down 0.1%. Traders await Canada's monthly GDP for January and preliminary GDP estimates for February due later in the day.  (Gowri Lakshmi)

India Rupee: Premium falls as banks sell fwd dollars likely for corporates

NEW DELHI – Premium on the one-year dollar/rupee forward contract fell slightly as some banks sold the greenback for forward delivery, likely on behalf of some Indian corporates, dealers said. "There has been recieving in the last few days, corporates are there. That trend seems to be continuing. The cash has also come off a bit, so that readjustment may also be reflecting," said a dealer at a state-owned bank. The last-day-first-day forward rate, an overnight swap done on the last day of the financial year, rose sharply on Thursday to almost 14%.  

Further, some banks sold dollars for forward delivery on the view that the differential between Indian and US yields may narrow going ahead as the Reserve Bank of India's Monetary Policy Comittee may to go for a 25 bps rate cut in April, dealers said.

Meanwhile, some banks bougtht dollars for forward delivery on behalf of importers, noting the sharp rise in the rupee, which limited the fall in premiums, they said. The rupee surged to a high of 85.4000 a dollar in the domestic spot market. 

At 1440 IST, the one-year forward premium was 185.50 paise against Thursday's close of 187.02. On an annualised basis, the premium was 2.17% against Thursday's 2.18%. (Pratiksha)

India Rupee: Surges as foreign bks sell dlrs for FX inflows, dlr index weak

MUMBAI – The rupee rose further against the dollar Friday as foreign banks sold the greenback for foreign-fund inflows, likely into some Indian corporates, dealers said. Weakness in the dollar index also supported the local unit, they said. 

The dollar index remained weak on concerns that latest tariffs announced by US President Donald Trump may lead to a growth slowdown in the world's largest economy. Investors also assessed the impact of the upcoming slew of reciprocal tariffs, set to take effect from next week. 

At 1325 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies was at 104.21 compared to 104.28 on Thursday and 104.67 on Wednesday. Traders await the personal consumption expenditure price index, the Federal Reserve's preferred gauge of inflation, due later in the day, to get further cues on the health of the US economy. 

The rupee also found support in banks' dollar sales for exporters, looking to meet their financial-year end payment requirements, dealers said. However, gains in the Indian unit were capped by importers' dollar demand to meet their month-end payment requirements, they said. "Market is moving in both directions today (Friday). There was selling (dollar) pressure in the morning and now buying pressure has also come in," a currency trader at a state-owned bank said. 

A fall in domestic equities also exerted pressure on the rupee, according to dealers. At 1255 IST, both the benchmark indices, the Nifty 50 and the BSE Sensex, were down 0.3%, each. 

For the rest of the day, the rupee is seen moving in a range of 85.40-85.80 against the dollar. Dealers see immediate technical resistance for the Indian unit at 85.45 a dollar. (Gowri Lakshmi)

India Rupee: Technical Levels for rupee - Mar 28

MUMBAI – At 1123 IST, the rupee was at 85.6200 per dollar. At 0900 IST, the rupee was at 85.6450 a dollar, against the previous close of 85.7800. Following are the key support and resistance levels for the rupee as provided by leading banks and brokerages:

(Gowri Lakshmi)

India Rupee: Rises sharply as dollar index falls on growth slowdown concerns

NEW DELHI – The rupee rose sharply against the dollar on Friday as the dollar index declined owing to concern that latest tariffs announced by US President Donald Trump may lead to a growth slowdown in the world's largest economy, dealers said. Trump Wednesday announced a 25% tariff on automobiles and certain auto parts imported into the US.  

Market participants are now on edge and may refrain from placing large bets ahead of Trump's announcement of a slew of new tariffs next week. At 0930 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 104.26, compared with 104.28 on Thursday and 104.67 on Wednesday. The index touched a low of 104.07 on Thursday. 

Market participants also await the US personal consumption expenditure price index, the Federal Reserve's preferred gauge of inflation, for February, due later in the day, to get more cues into the health of the US economy. 

"It is the last (trading) day of the (financial) year, I don't think a lot will happen today," said a dealer at a private bank. "I think we will see a concrete retracement in rupee from April now."

However, a fall in other Asian currencies weighed on the Indian unit, according to dealers. Other emerging market units fell 0.1-0.3% against the dollar. 

The Indian currency may come under pressure during the day as banks may purchase the greenback on behalf of importers to meet their month-end payment requirements, dealers said. "For the day, we expect a range of 85.60-86.00 (a dollar) as we close today, the week, month, quarter and year. There is a host of data to be released, particularly the current account data of last quarter. Exporters to wait for better levels to sell (dollars)," said Anil Kumar Bhansali, head of treasury and executive director at Finrex Treasury Advisors LLP. 

For the rest of the day, the rupee is seen moving in a range of 85.50-86.00 against the dollar. Dealers see key technical resistance for the Indian unit at 85.50 a dollar. (Pratiksha)

India Rupee - Asia FX: Most down on risk-off sentiment amid trade war fear

Informist, Friday, Mar. 28, 2025

MUMBAI - Most Asian currencies were down against the dollar on Friday due to a risk-off sentiment among investors on growing fear of a global trade war. This is after US President Donald Trump announced 25% tariff on imported automobiles and on certain imported parts. The tariffs are set to come into effect from Apr. 3. Investor sentiment also took a hit as Trump threatened to impose far larger tariffs, should Canada and Europe join hands to retailate. 

The South Korean won fell 0.2% against the US dollar. Since South Korea's economy depends largely on exports, it has a higher sensitivity to Trump's tariff measures. Further, a poll conducted by The Wall Street Journal showed that the country's exports in March would have remained robust, growing 1.7% on year against a revised growth of 0.7% gain in February.

The Taiwan dollar was down 0.2% against the greenback as the nation's consumer confidence fell in March. Survey conducted by Taiwan Economic Development Research Center said the consumer confidence fell to an 11-month low of 71.86 this month. 

The Philippines peso was up 0.1% against the greenback as the latest data released Friday showed exports from the country last month rose 3.9% on year, with imports falling 1.8% on year. While exports increased as expected, imports surprisingly fell against an expectation of 9.7% rise.

The Indonesian rupiah was down 0.1% against the US dollar, while the Malaysian ringgit was steady. The Thai baht fell 0.3% against the greenback, weighed by a fall in the benchmark stock index. The Thailand SET index was down 0.4% on Friday.  (Sourabh Kumar)

India Rupee: Expected range for rupee - Mar 28

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

(Gowri Lakshmi and Sourabh Kumar)

End

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

Edited by Akul Nishant Akhoury

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