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Informist, Thursday, Apr. 17, 2025

 

By Gowri Lakshmi

 

MUMBAI – The rupee ended near a two-week high against the dollar Thursday as banks sold the greenback for foreign-fund inflows into domestic markets, dealers said. Some traders also trimmed their long dollar positions, which further supported the rupee, dealers said.

 

"Panic sell-off came in towards the end," a currency trader at a private bank said. "Traders trimmed their (long dollar) positions before the long weekend. Stop-losses were triggered at multiple (dollar/rupee) levels, especially after 85.55 (a dollar) and above." 

 

After rising to 85.3400 a dollar in the day, the rupee ended the week at 85.3675 against the greenback, as against 85.6775 a dollar on Wednesday. The Indian currency moved in a range of little over 27 paise on Thursday. It was the best-performing currency amongst its regional peers Thursday, gaining 0.4% against the greenback.

 

Most other Asian currencies also strengthened against the greenback due to weakness in the dollar index. Barring the Thai baht and the South Korean won, the other Asian currencies rose between 0.1% and 0.4% against the US dollar.

 

The rupee opened sharply higher against the greenback at 85.4800 because of the weak dollar index. The US dollar remained weak as investors continued to prefer other safe-haven assets due to US President Donald Trump's tariff policies and the resultant volatility, dealers said. As a result, the Japanese yen and the Swiss franc have strengthened against the US dollar in recent weeks, they said.

 

US Federal Reserve Chair Jerome Powell said Wednesday the Fed will wait for more economic data to get more cues before changing interest rates. He also warned that Trump's tariff policies may push inflation in the US higher, leading to an overall slowdown in the world's largest economy. It also weighed on the dollar index.

 

The dollar index, which measures the strength of the dollar against a basket of six major currencies, fell to a low of 99.20 during the day. At 1530 IST, the dollar index was at 99.51, up from 99.28 Wednesday and 100.10 Tuesday. 

 

Banks persistently sold dollars on behalf of overseas investors, who wanted to invest in Indian markets, dealers said. The inflows kept the rupee supported through the day, they said. The benchmark equity indices ended in the green for the fourth consecutive trading day on Thursday, with the Nifty 50 closing 1.8% higher and the BSE Sensex closing 2.0% higher from the previous day. The Indian government bond market also received some foreign fund inflows, which supported the rupee, dealers said. 

 

However, gains in the Indian currency were capped as public-sector banks purchased the greenback on behalf of importers, taking advantage of relatively lower dollar/rupee rates, dealers said. Some importers started buying dollars as soon as the market opened, which weighed on the rupee in early trade, dealers said. After opening at 85.4800 a dollar, the Indian currency fell below 85.55 a dollar within the first hour. But others preferred to wait, expecting the rupee to rise before placing large bets, dealers said.

 

Some dealers also speculated that public-sector banks may have bought the greenback on behalf of the Reserve Bank of India to limit the rupee's sharp rise and curb excessive market volatility.

 

They speculated that the central bank intervened towards the last hour of trading, when some traders unwound their long dollar positions before the long weekend on expectations of a persistent weakness in the US dollar, dealers said. It triggered a few stop-losses on long dollar bets at multiple levels, pushing the rupee to the day's high, they said.

 

Further, in a truncated week with markets closed on Monday and Friday, the Indian currency strengthened 0.8% against the dollar due to persistent foreign fund inflows, coupled with a weak dollar index. So far, the dollar index has fallen 0.3% this week.
 

"The market saw a huge sell-off (of dollars). Nats (Nationalised banks) were active (to buy dollars) since morning... could be for RBI," a currency trader at a brokerage firm said. "This kind of rise was not anticipated in the market, exporters may have a hard time now. Importers are well hedged now."

 

	AT 1530 IST	AT 0900 IST	HIGH	LOW	PREVIOUS(AT 1530 IST)
Spot rupee per $1	85.3675	85.4800	85.3400	85.6125	85.6775
1-year dlr/rupee fwd (paise)	177.17	186.19	186.19	177.17	187.16

 

FORWARDS

The dollar/rupee forward premiums ended lower across tenors Thursday, with the one-year exact-period forward premium ending at a six-week low as banks sold the greenback for forward delivery on behalf of exporters and other Indian companies, dealers said. 

 

"Exporters were hedging as they think the outlook for the rupee is better than other currencies, and that it will not depreciate as much," a dealer with a private bank said. 

 

So far this month, the rupee has risen 0.1%, whereas the offshore Chinese yuan has fallen over 0.5% against the dollar. Further, the higher odds of India being able to secure a trade deal with the US and worries over China's trade relations with the world's largest economy will result in a slightly better outlook for the Indian currency, dealers said. 

 

The dollar/rupee forward premium has fallen this week despite the downward movement in the 10-year benchmark US Treasury yield. In the current week, the one-year exact-period dollar/rupee forward premium fell over 14 basis points. 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 ended at 177.17 paise, down from 187.16 paise Wednesday. On an annualised basis, the premium ended at 2.08%, down from 2.18% on Wednesday and Tuesday. 

 

OUTLOOK

The currency market is shut on Friday on account of Good Friday. On Monday, the rupee will take cues from the movement of the dollar index and offshore Chinese yuan, dealers said. Market participants will closely watch developments in the US-China trade relations and any turns in Trump's tariff policies. 

 

Traders will assess the US weekly initial jobless claims data, due later in the day. "I guess, if the data comes stronger, the dxy (dollar index) should rise... and the rupee may not appreciate as much," a dealer at a public sector bank said. "After the long weekend, the rupee will be back at where it was and will likely open at 85.55 (a dollar) levels," another dealer at a private bank said. 

 

The rupee may receive support as overseas investors are likely to continue selling dollars for inflows into the domestic financial markets, dealers said. However, the gains may be capped due to the expectation of persistent dollar purchases by importers, who would want to take advantage of the relatively lower dollar/rupee levels.

 

During the day, the rupee is seen moving in a range of 85.30-85.80 against the dollar. Dealers see technical resistance for the Indian unit at 85.30 a dollar.

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India Rupee - World FX: Euro down 0.3% ahead of ECB monetary policy outcome

 

	AT 1508 IST	HIGH	LOW	PREVIOUS
GBP/USD	1.3240	1.3248	1.3204	1.3244
EUR/USD	1.1375	1.1410	1.1344	1.1396
NZD/USD	0.5927	0.5943	0.5900	0.5932
AUD/USD	0.6353	0.6376	0.6333	0.6370
USD/JPY	142.7930	143.0890	141.6190	141.7510
USD/CAD	1.3885	1.3896	1.3856	1.3863
EUR/JPY	162.3800	162.6580	161.5300	161.5400
CHF/USD	1.2236	1.2302	1.2196	1.2282
EUR/CHF	0.9296	0.9317	0.9268	0.9262

 

MUMBAI – The euro was down 0.3% against the US dollar Thursday ahead of the European Central Bank's monetary policy decision due later in the day. The central bank is widely expected to cut benchmark lending rates by 25 basis points to 2.25% to spur the bloc's sluggish economy, which has been threatened by the hike in tariffs by the US. 

 

The euro was also weighed after data published on Thursday showed that the producer price index in Germany, the largest economy in the bloc, fell by 0.2% in the twelve months to March. The producer price index declined 0.7% on month.

 

The dollar index inched slightly higher during European trade due to weakness in the euro. However, the dollar has begun losing its safe-haven sheen as investors moved to other safe-haven currencies due to US President Donald Trump's tariff policies and the resultant volatility. The Swiss franc was down 0.4% against the greenback. 

 

US Federal Reserve Chair Jerome Powell said Wednesday the Fed will wait for more economic data to get more cues before changing interest rates. He also warned that Trump's tariff policies could push inflation higher and lead to an overall slowdown. "For the time being, we are well-positioned to wait for greater clarity before considering any adjustments to our policy stance," Powell said at the Economic Club of Chicago. 

 

At 1508 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 99.52, up from 99.28 Wednesday but down from 100.01 Tuesday. The pound sterling traded flat against the greenback. 

 

The Japanese yen was down 0.6% against the greenback after Bank of Japan policymakers on Thursday cautioned against heightened uncertainty over trade and tariff policies of the US. Bank of Japan Governor Kazuo Ueda said the tariffs could damage household confidence and the country's fragile economy. Reuters reported that the central bank is set to cut its economic growth forecasts at its Apr. 30-May 1 policy meeting as Trump's tariffs have increased risks to a fragile, export-reliant recovery, weighing on the yen. 

 

The Canadian dollar was down 0.2% against the greenback. The Bank of Canada held its benchmark lending rates steady at 2.75%, pausing the monetary policy easing cycle after seven consecutive cuts. The central bank said it was ready to act to keep inflation under control. Given the uncertainty around tariffs and trade policies by the US, Canada's largest trading partner, the Bank of Canada's governor said the central bank policymakers will wait for further cues and clarity.  

 

The Australian dollar was down 0.3% against the US currency. However, losses in the currency were limited after data released on Thursday showed that Australia's employment rebounded in March, with the unemployment rate falling slightly below forecasts. Total employment rose by 32,200 in March from a month ago. The jobless rate rose 4.1% from 4.0%, but was below the analysts' forecast of 4.2%. 

 

Tracking losses in the Australian economy, the New Zealand dollar was down 0.1% against the greenback. Any change in the Australian economy directly impacts the New Zealand currency due to their close bilateral trade relations.  (Gowri Lakshmi)

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India Rupee: Erases some gains on importers' dollar buys; FPI flows support

 

	AT 1243 IST	AT 0900 IST	HIGH	LOW	PREVIOUS(AT 1530 IST)
Spot rupee per $1	85.5800	85.4800	85.4800	85.6000	85.6775

 

MUMBAI – The rupee erased some of its gains as importers purchased dollars, noting relatively lower dollar/rupee levels, dealers said. However, the rupee was supported by banks, which sold dollars for foreign fund inflows into domestic equities, dealers said.

 

"The rupee has only moved around 10-12 paise, it's (the market) relatively calm. In the morning, nats (nationalised banks) bought, likely to prevent a sharp rise in the rupee. Now importers have started coming in... these are good rates for them," a currency trader at a brokerage firm said. "The rupee will likely remain within this range (85.4800-85.6500) for the rest of the day."

 

So far in the day, the rupee has moved in a range of 12 paise against the dollar. The Indian currency received support as a few foreign banks sold dollars, on behalf of overseas investors looking to invest in the domestic stock market, dealers said. At 1240 IST, benchmark stock indices Nifty 50 and BSE Sensex were up 1.1% and 1.2%, respectively. 

 

The dollar index, while it inched up slightly in early European trade, was still weak. At 1240 IST, the index, which measures the strength of the dollar against a basket of six major currencies, was at 99.57, higher than 99.28 on Wednesday but lower compared to 100.01 on Tuesday. The dollar index has remained weak as investors preferred other safe-haven assets amid the ongoing volatility in US trade policies. 

 

Most exporters are likely to sell dollars on Thursday only when the rupee falls beyond 85.6500 a dollar, dealers said. For the rest of the day, the rupee is seen moving between 85.45 and 85.65 a dollar. Dealers see immediate technical resistance for the Indian unit at 85.50 a dollar. (Gowri Lakshmi)

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India Rupee: Technical levels for rupee - Apr 17

 

MUMBAI – At 1115 IST, the rupee was at 85.5700 per dollar. At 0900 IST, the rupee was at 85.4800 a dollar, against the previous close of 85.6775. 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	85.75	85.65	85.45	85.35
Private bank	86.10	86.00	85.45	85.30
Private bank	85.70	85.62	85.48	85.46

(Gowri Lakshmi and Pratiksha)

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India Rupee: Up on weak dollar; importers' dlr buys, fall in yuan cap gains

 

	AT 0923 IST	AT 0900 IST	HIGH	LOW	PREVIOUS(AT 1530 IST)
Spot rupee per $1	85.5375	85.4800	85.4800	85.5500	85.6775

 

MUMBAI – The rupee traded higher against the dollar on Thursday due to sustained weakness in the greenback, dealers said. However, gains in the currency were capped after banks purchased dollars on behalf of importers, according to dealers. A fall in the offshore Chinese yuan also limited the rise of the Indian currency, they said. The rupee hit a near two-week high of 85.4800 a dollar at open. 

 

The dollar index remained weak as investors continued to move to other safe-haven assets amid uncertain trade policies of the US, dealers said. The index declined on Wednesday after US Federal Reserve Chair Jerome Powell said the Fed would wait for more economic data to get insight into the health and direction of the US economy before changing interest rates. He also cautioned that US President Donald Trump's tariff and trade policies could lead to a rise in inflation and an overall economic slowdown.

 

At 0932 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 99.57, up from 99.28 on Wednesday but down from 100.10 on Tuesday. Other safe-haven currencies such as the Japanese yen and the Swiss franc were up 0.5% each against the greenback. 

 

Gains in the Indian currency were limited as banks purchased dollars on behalf of some importers, who wanted to take advantage of the relatively lower dollar/rupee levels, dealers said. However, despite the sharp rise, dealers said most importers remained on the sidelines, anticipating further rise of the rupee.

 

"Currently, at these levels, there is hesitation on both sides (for buying and selling). Maybe if the market moves further toward a particular direction we may see some rush... especially of importers," a dealer at a state-owned bank said. "It is unlikely to breach 85.45 (a dollar) as several stop losses are there and there will be strong resistance."

 

The offshore Chinese yuan was down 0.1% against the greenback in early Asian trade, owing to heightened trade tensions with the US. This capped gains for the rupee, according to some dealers. 

 

Volumes in the currency market are expected to be higher than usual due to a long weekend, dealers said. The Indian currency market will be shut on Friday on account of Good Friday. Market participants now await US initial jobless claims data and the monetary policy decision by the European Central Bank, both due later in the day. 

 

During the day, the rupee is seen moving between 85.40 and 85.70 a dollar. Dealers see immediate technical resistance for the Indian unit at 85.45 a dollar. (Gowri Lakshmi)

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India Rupee - Asia FX: Mixed; Bank of Korea holds rates amid tariff worries

 

MUMBAI – Asian currencies traded on a mixed note against the dollar on Thursday amid escalation in trade tensions between the US and China. The South Korean won was down 0.3% against the greenback in early trade. Bank of Korea held its benchmark rate steady at 2.75% on Thursday, in line with expectations, as it navigates further trade and tariff negotiations with Washington. 

 

The offshore Chinese yuan was down 0.1% against the greenback amid ongoing tariff tensions with the US. China's exports to the US now face up to 245% tariffs, the White House clarified on Wednesday. According to an analysis by The New York Times, syringes and needles from China will face 245% import duty. Lithium-ion batteries are subject to 173% tariffs, while squid and wool sweaters face 170% and 169% tariff, respectively. 

 

The dollar index rose marginally in early trade Thursday due to weakness in the euro. However, investors continued to move to other safe-haven assets apart from the US dollar. The Swiss franc and the Japanese yen were up 0.4% and 0.5%, respectively. 

 

US Federal Reserve Chair Jerome Powell on Wednesday said the central bank would wait for more economic data for insight into the direction of the world's largest economy before making any changes to interest rates. He also hinted that the ongoing tariff flip-flops and trade policies might push inflation and employment further from the Fed's goals. 

 

"For the time being, we are well-positioned to wait for greater clarity before considering any adjustments to our policy stance," Powell said at the Economic Club of Chicago. "I do think we'll be moving away from those goals, probably for the balance of this year. Or at least not making any progress."

 

Data on Wednesday showed retail sales in the US were stronger than expected. Retail sales in March rose 1.4% on month, better than the analysts' forecast of 1.2% in a Dow Jones poll, showing consumer spending was resilient during the month. 

 

At 0839 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 99.49, up from 99.28 Wednesday but down from 100.10 Tuesday. 

 

The Malaysian ringgit traded flat, while and the Philippine peso was up 0.2% against the greenback. The Indonesian rupiah was up 0.1% against the greenback. Indonesian diplomats and top US officials discussed tariffs and defence at a meeting on Wednesday. US Secretary of State Marco Rubio discussed ways to deepen security and defence cooperation, the state department said in a statement. 

 

The Thai baht was down 0.2% against the greenback and the Taiwan dollar was down 0.1%. Taiwan is said to prioritise the development of silicon photonics to protect its local economy, head of the National Development Council Liu Chin-ching said on Wednesday.  (Gowri Lakshmi)

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India Rupee: Expected range for rupee - Apr 17

 

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

 

PARTICIPANT	SUPPORT	RESISTANCE
State-owned bank	85.65	85.40
Foreign bank	85.85	85.35
Brokerage firm	85.60	85.40

 

 

 

 

 

 

(Sourabh Kumar and Gowri Lakshmi)

 

 

End

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

 

Edited by Saji George Titus

 

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