India Rupee Review
Ends sharply up as dollar index plunges to over 3-yr low
This story was originally published at 17:25 IST on 11 April 2025
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By Gowri Lakshmi
MUMBAI – The rupee ended sharply higher against the dollar Friday as the dollar index plunged to an over 3-year low due to the ongoing tariff war between the US and China, dealers said. Some traders also trimmed their long dollar positions, which further aided the rupee, they said.
"Dollar weakness is expected to sustain for some time now, at least till more clarity is given on the tariff front," a currency trader at a brokerage said. "Some traders have started to cut their (long) dollar positions due to it (dollar weakness) and a near-term appreciation is seen in the rupee."
After rising to a high of 85.9500 against the greenback, the rupee ended at 86.0400 a dollar, compared to the previous close of 86.6875. The rupee moved in a range of over 28 paise during the day. Dollar purchases by banks for importers limited the rise in the Indian unit, dealers said.
A rise in other Asian currencies also aided the rupee, dealers said. Other Asian currencies rose between 0.1-1.1% against the greenback, with the South Korean won being the best performer.
The rupee surged over 40 paise against the dollar at the start of trade as the dollar index plummeted to multi-month lows in early Asian trade, dealers said. Later in the day, the index plunged further to an over 3-year low as China raised tariffs on US goods to 125% from 84%. On Wednesday, US President Donald Trump announced a 90-day pause on reciprocal tariffs imposed on its trading partners but raised tariffs on China to 125%.
At 1530 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies was at 99.67, down from 100.91 Thursday and 102.91 Wednesday. The index fell to 99.01, the lowest since Apr.5, 2022. The dollar index has fallen 4.1% since Apr. 2, when US President Donald Trump announced reciprocal tariffs on its major trading partners.
The rupee also received support as traders began to trim their long dollar bets due to its sustained weakness, dealers said. This pushed the rupee to 85.9500, logging the sharpest intraday gain since February.
A rise in the domestic stock market also aided the Indian unit, dealers said. Both the benchmark indices, the Nifty 50 and the BSE Sensex ended 1.9% and 1.7% higher, respectively. Dealers also said some banks sold dollars for foreign fund inflows into the Indian equity market.
However, the rupee's rise was limited as importers rushed to purchase dollars, noting the relatively lower dollar/rupee levels, dealers said. "It was a buy-on-dips market. Importers' panic has subsided from what we saw earlier this week. They are hedged at good levels," a dealer at a state-owned bank said. "So it's just a few importers buying for the attractive levels and given the uncertainty."
Some banks also purchased dollars ahead of the daily reference-rate fixing window earlier in the day, which dragged the rupee to the day's low of 86.2350 a dollar.
| AT 1530 IST | AT 0900 IST | HIGH | LOW | PREVIOUS(AT 1530 IST) | |
| Spot rupee per $1 | 86.0400 | 86.2025 | 85.9500 | 86.2350 | 86.6875 |
| 1-year dlr/rupee fwd (paise) | 190.88 | 196.00 | 196.00 | 189.75 | 198.94 |
FORWARDS
Premiums on dollar/rupee forward contracts ended lower on Friday, tracking a rise in the benchmark 10-year US Treasury yield, dealers said. The premium on the one-year exact-period dollar/rupee forward contract fell to over a week's low of 2.20%.
The 10-year US Treasury yield ended six basis points higher on Thursday, and rose further in European trade Friday, pushing the dollar/rupee forward premiums down. Forwards of a currency pair reflect the interest rate differential between the two countries.
Due to unexpected movement in US Treasury yields--where they have been oddly rising at times of global uncertainty--dealers refrained from providing a directional view on dollar/rupee forward premiums. In the latest tariff war between the US and China, the Asian nation Friday imposed a 125% tariff on US imports, up from 84%. This was in retaliation to US President Donald Trump's announcement of a hike in tariffs on China to 145%.
At 1530 IST, the premium on the one-year exact period forward contract ended at 190.88 paise, compared with 198.94 paise Wednesday and 198.61 paise Tuesday. On an annualised basis, the premium ended at 2.21%, down from 2.29% Wednesday and 2.28% Tuesday.
OUTLOOK
Money markets are shut on Monday on account of Babasaheb Ambedkar Jayanti. On Tuesday, the rupee will take cues from the movements in the dollar index and offshore Chinese yuan, dealers said. Dealers expect the weakness in the dollar index to sustain and importers to continue purchasing the greenback to take advantage of the relatively lower dollar/rupee levels.
"Importers' buy will always be there. Any clarity on the direction of the currency will be difficult given how fast things are escalating on the geopolitical front," a currency trader at a brokerage said. "Due to competitive depreciation in currencies, if the yuan falls, the rupee will follow that." Market participants will closely watch the developments on tariffs, especially from the US, dealers said.
During the day, the rupee is seen moving in a range of 85.90-86.40 against the dollar. Dealers see technical resistance for the Indian unit at 85.90 a dollar. End
India Rupee: Premiums fall on rise in US yields; banks' fwd dlr sales weigh
| AT 1438 IST | AT 0900 IST | HIGH | LOW | PREVIOUS(AT 1530 IST) | |
| Spot rupee per $1 | 86.1175 | 86.2025 | 85.9500 | 86.2350 | 86.6875 |
| 1-year dlr/rupee fwd (paise) | 190.75 | 196.00 | 196.00 | 189.75 | 198.94 |
MUMBAI – Premiums on dollar/rupee forward contracts were down Friday, tracking a rise in the benchmark 10-year US Treasury yield, dealers said. The premium on the one-year exact-period dollar/rupee forward contract fell to over a week low of 2.20%.
"Forward premiums have come down due to UST (US Treasury), but I am not sure if this direction will hold," a dealer with a state-owned bank said. A few banks sold dollars for forward delivery, which also pushed premiums lower, dealers said.
The 10-year US Treasury yield ended six basis points higher on Thursday, and rose further in European trade Friday, pushing the dollar/rupee forward premiums down. Forwards of a currency pair reflect the interest rate differential between the two countries.
Due to unexpected movement in US Treasury yields--where they have been oddly rising at times of global uncertainty--dealers refrained from providing a directional view on dollar/rupee forward premiums. Some reports, including one by Bloomberg, speculated that China--one of the largest holders of US government securities--might have been off-loading US Treasury bonds, which may partly be the reason for a rise in US Treasury yields recently, especially this week.
A report by Market News International on Friday indicated that China may continue to diversify its foreign exchange reserves if its relations with the US deteriorate and the safe-haven status of US debt comes into question. "US tariffs raise concerns about the arbitrariness of its policy, while China's large holdings of US Treasuries could become a key leverage point for Washington to pressure Beijing," Zong Liang, chief researcher of Bank of China, told Market News International in an interview.
In the latest tariff war between the US and China, the Asian nation Friday imposed a 125% tariff on US imports, up from 84%. This was in retaliation to US President Donald Trump's announcement of a hike in tariffs on China to 145%.
A few dealers said forward premiums may rise due to the expectation that US Treasury yields will ultimately have to come down, as global trade uncertainty may drive the US economy to recession, thus boosting chances of a sooner-than-expected rate cut by the Federal Reserve.
At 1435 IST, the one-year exact period forward premium was 2.22%, on an annualised basis, against 2.29% Wednesday. On an absolute basis, the premium was 190.75 paise, down from Wednesday's close of 198.94 paise. The currency market was closed on Thursday due to Mahavir Jayanti. (Sourabh Kumar)
India Rupee - World FX: Dlr index plunges to 3-yr low on US-China trade war
| AT 1443 IST | HIGH | LOW | PREVIOUS | |
| GBP/USD | 1.3093 | 1.3134 | 1.2968 | 1.2961 |
| EUR/USD | 1.1403 | 1.1475 | 1.1200 | 1.1192 |
| NZD/USD | 0.5814 | 0.5815 | 0.5739 | 0.5735 |
| AUD/USD | 0.6222 | 0.6259 | 0.6181 | 0.6222 |
| USD/JPY | 142.5300 | 144.5340 | 142.0750 | 144.5310 |
| USD/CAD | 1.3897 | 1.3984 | 1.3882 | 1.3971 |
| EUR/JPY | 162.5580 | 163.1350 | 161.3140 | 161.7800 |
| CHF/USD | 1.2251 | 1.2334 | 1.2109 | 1.2111 |
| EUR/CHF | 0.9307 | 0.9311 | 0.9228 | 0.9237 |
MUMBAI – The dollar index plunged to an over three-year low as China on Friday retaliated against tariffs imposed on it by the US by raising import duties on US goods to 125% from 84%, the Chinese finance ministery said. "Even if the US continues to impose higher tariffs, it will no longer make economic sense and will become a joke in the history of world economy," the ministry said in a statement.
The move spooked investors, as they continue to assess the impact of the ongoing US-China tariff war. On Wednesday, US President Donald Trump paused aggressive reciprocal tariffs imposed on its trading partners – he announced a 90-day tariff freeze, but maintained the 10% baseline duty. However, tariffs on Chinese imports, were raised to a cumulative 145% with immediate effect after China's retaliatory measure of 84% tariff on Washington.
At 1445 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies was at 99.46, down from 100.91 Thursday and 102.91 Wednesday. The index fell to a low of 99.01, the lowest level since Apr. 5, 2022.
Due to the sharp decline in the dollar index, the euro gained 1.9% against the greenback while the Swiss franc rose 1.0%. The Swiss franc hit an over 10-year high of 0.814 against the dollar, the highest level since Jan. 15, 2015, earlier in the day due to safe-haven inflows.
The Japanese yen too rose 1.2% against the dollar. The latest survey by Bank of Japan showed households' inflation expectations increased in Jan-Mar, further reinforcing the likelihood of the central bank raising interest rates. The survey showed 86.7% of households expect prices to rise from now. The data point is among the factors the Japanese central bank will scrutinise at its Apr. 30 - May. 1 meeting.
The pound sterling was up 0.9% after the UK's GDP growth exceeded forecasts. The UK economy unexpectedly expanded by 0.5% in February, against a forecast of 0.1% in a Reuters poll. On year, the GDP was 1.4% higher. UK's Finance Minister Rachel Reeves called the data "encouraging", though investors were more focused on the impact of the tariffs imposed by Washington.
The Australian dollar was down 0.2% against the greenback due to ongoing trade tensions between Beijing and Washington. Any change in the Chinese economy directly impacts the currency of Australia due to their close bilateral trade relations. The New Zealand dollar rose 1.3% while the Canadian dollar was up 0.5%. (Gowri Lakshmi)
India Rupee: Sharply up on slump in dollar index, cut in long dlr positions
| AT 1323 IST | AT 0900 IST | HIGH | LOW | PREVIOUS(AT 1530 IST) | |
| Spot rupee per $1 | 86.0625 | 86.2025 | 85.9500 | 86.2350 | 86.6875 |
MUMBAI – The rupee rose further during the day, surging against the dollar as traders unwound their long dollar positions, dealers said. The Indian unit had surged earlier in the day due to a slump in the dollar index, which fell to a near 21-month low on Friday, dealers said.
However, gains in the rupee were capped due to banks' dollar purchases on behalf of importers, dealers said. Banks rushed to purchase dollars on behalf of importers, who wanted to take advantage of the relatively lower dollar/rupee levels, dealers said.
Some public-sector banks also purchased dollars ahead of the daily reference rate fixing window, which pulled the rupee down from the day's high of 85.9525 a dollar.
"There is importers' (dollar) buying, but it is not as aggressive since they have already hedged their positions earlier when rupee was at 85.50 and above," a currency trader at a state-owned bank said. "So we can see more rush if rupee rises above 85.90 (a dollar) later in the day."
The rupee received support as some traders trimmed their long dollar positions, owing to the expectation of sustained weakness in the dollar index amid the ongoing tariff war between the US and China, dealers said. The index hit a near 21-month low of 99.71 earlier in the day.
On Wednesday, US President Donald Trump paused the higher reciprocal tariffs imposed on most of the country's trading partners, except on China. Trump announced a 90-day freeze, but maintained the 10% baseline duty. However, tariffs on Chinese imports, were raised to a cumulative 145% with immediate effect after China's retaliated with an 84% tariff on Washington.
At 1323 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 99.78, down from 100.91 Thursday and 102.91 Wednesday. The index fell to 99.71 in early trade, the lowest level since Jul. 18, 2023. The dollar index has fallen 3.8% since Apr. 2, when Trump announced reciprocal tariffs on its major trading partners.
A rise in domestic equities also supported the Indian unit, according to some dealers. At 1259 IST, the benchmark indices, the Nifty 50 and the BSE Sensex, were up 2.2% and 2.1%, respectively.
For the rest of the day, the rupee is seen moving in a range of 85.90-86.25 against the dollar. Dealers pegged the immediate technical resistance for the Indian unit at 85.90 a dollar. (Gowri Lakshmi)
India Rupee: Technical Levels for rupee - Apr 11
MUMBAI – At 1108 IST, the rupee was at 86.0575 per dollar. At 0900 IST, the rupee was at 86.2025 a dollar, against the previous close of 86.6875. Following are the key support and resistance levels for the rupee as provided by leading banks and brokerages:
| Participants | S2 | S1 | R1 | R2 |
| State-owned bank | 86.25 | 86.20 | 85.90 | 85.85 |
| State-owned bank | 86.40 | 86.25 | 85.80 | 85.65 |
| Private bank | 86.34 | 86.25 | 85.76 | 85.75 |
| Brokerage firm | 86.80 | 86.50 | 85.60 | 85.50 |
(Sourabh Kumar and Gowri Lakshmi)
India Rupee: Surges as dollar at 21-mo low on US-China trade war escalation
| AT 0953 IST | AT 0900 IST | HIGH | LOW | PREVIOUS(AT 1530 IST) | |
| Spot rupee per $1 | 86.1550 | 86.2025 | 86.1250 | 86.2350 | 86.6875 |
MUMBAI – The rupee surged against the dollar on Friday as the dollar index plunged to a near 21-month low due to fear of further escalation in trade tensions between the US and China, dealers said. However, gains in the rupee were capped as banks purchased dollars on behalf of importers, who wanted to take advantage of the relatively lower dollar/rupee levels, dealers said.
"The market movement is purely due to fall in the dollar (index)," a currency trader at a brokerage firm said. "Some importers are buying, while most are waiting for further rise. However, it's a buy on dips market today (Friday), importers will rush in at all levels."
The rupee rose sharply after the US dollar fell against most currencies due to uncertainty around the tariff war between the US and China. On Wednesday, US President Donald Trump paused the aggressive reciprocal tariffs imposed on its trading partners. Trump announced a 90-day freeze, but maintained the 10% baseline duty.
At 0953 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies was at 100.3, down from 100.91 Thursday and 102.91 Wednesday. The index fell to 99.71, the lowest since Jul. 18, 2023. The dollar index has fallen 3.9% since Apr. 2, when Trump announced reciprocal tariffs on its major trading partners.
However, tariffs on Chinese imports, were raised to a cumulative 145% with immediate effect after China's retaliatory measure of 84% tariff on Washington.
Further, the dollar index fell after the US consumer price index unexpectedly fell 0.1% on month in March.
During the day, the rupee is seen moving in a range of 86.00-86.40 a dollar. Dealers see immediate technical resistance for the Indian unit at 86.10 a dollar. (Gowri Lakshmi)
India Rupee - Asia FX: Rises as dollar index plunges to near 21-month low
MUMBAI – Asian currencies rose against the dollar as the dollar index slumped to near a 21-month low early Friday. The dollar index fell sharply as investors feared the trade war between the US and China may intensify after US President Donald Trump provided a respite in the imposition of higher reciprocal tariffs on most countries, except China.
Trump raised the tariff imposed on the world's second-largest economy, taking the cummulative tariff to 145%. US On Wednesday, Trump said all countries that did not retaliate against US tariffs would receive a 90-day reprieve from the higher tariffs, and would be subject to 10% tariff for now.
The dollar index, which measures the strength in the greenback against a basket of six major currencies, fell to a near 21-month low of 99.71 in early trade. It was at 99.95 at 0936 IST, against 100.91 on Thursday and 102.91 on Wednesday.
Further, consumer prices in the US surprisingly fell in March, which also weighed on the dollar index. The US CPI fell 0.1% in March against the expectation of a 0.1% rise in a Reuters poll. The fall was against the 0.2% rise the month earlier. The fall in the CPI was primarily due to a drop in gasoline prices.
The Taiwan dollar was up 0.2% against the US dollar, primarily due to a sharp decline in the dollar index. Exports from Taiwan rose 18.6% on year to $49.57 billion, which also supported the Asian nation's currency. The rise was much higher than the widely expected 8.5% increase. The South Korean won and the Indonsian rupiah rose 0.3% and 0.2%, respectively, against the dollar. The Thai baht rose 0.5% against the greenback.
The Philippines peso rose 0.6% against the dollar due to a fall in the dollar index. While the country's central bank cut its benchmark rate by 25 basis points on Thursday, the governor indicated that they would be cautious in the quantum of future rate cuts. "We don't want to overdo it," Governor Eli Remolona told Bloomberg Friday. "If we overdo it, then we start to exceed capacity, then inflation comes back. So we want to get to the neutral rate smoothly."
The Malaysian ringgit was up 0.7% against the greenback, supported by the fall in the dollar index. A rise in its domestic stock index, Jakarta Stock Exchange Composite Index, which was up 0.1% in early trade Friday, also supported the ringgit. Further, Malaysia's central bank governor said Thursday that they would wait for the global trade situation to settle before revising growth forecasts. (Sourabh Kumar)
India Rupee: Expected range for rupee - Apr 11
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:
| PARTICIPANT | SUPPORT | RESISTANCE |
| State-owned bank | 86.40 | 86.10 |
| Foreign bank | 86.70 | 85.80 |
| Foreign bank | 86.47 | 85.97 |
| Brokerage firm | 86.32 | 86.12 |
| Brokerage firm | 86.60 | 86.00 |
(Gowri Lakshmi, Sourabh Kumar, and Pratiksha)
End
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Saji George Titus
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