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Informist, Monday, Apr. 28, 2025

By Gowri Lakshmi

MUMBAI – The rupee ended sharply higher and at an over three-month high against the dollar due to foreign fund inflows, dealers said. The Indian unit was supported as a few traders trimmed their long dollar positions, they said. However, the rupee's gains were limited on persistent dollar demand from importers, dealers said. 

"There have been significant bond flows (inflows) and some into equity, both markets saw strong inflows coming in, which helped the rupee move up," a dealer at a state-owned bank said. "Earlier in the day some traders also sold off their long dollar positions which is also a factor for today's (Monday's) rise (of the rupee)."

After rising to a high of 84.9600, the Indian unit settled at 85.0300 against the dollar, sharply higher from its previous close of 85.4500 a dollar. The Indian unit moved in a range of 44 paise during the day. 

Asian currencies moved on a mixed note as market participants await more clarity on the trade war between the US and China. The Indian unit emerged as the best performing currency in the region while the Philippine peso was the worst hit.

The rupee started the day sharply higher against the greenback due to foreign fund inflows into the domestic stock market, dealers said. The benchmark stock indices Nifty 50 and BSE Sensex ended 1.2% and 1.3% higher, respectively, Monday. Foreign portfolio investors have purchased $91 million worth of Indian equities so far this month. A few foreign fund inflows may have also been into the initial public offerings of Indian companies, according to some dealers. Ather Energy Ltd.'s offering opened for subscription on Monday and will close on Wednesday.

Noting the sharp rise in the rupee, a few exporters also sold dollars to take advantage of the relatively higher dollar/rupee levels around 85.30 a dollar, which supported the Indian unit, dealers said. "Continued foreign fund inflows and exporters' dollar sales pushed the rupee to touch the day's high," a currency trader at a brokerage firm said. "Some traders also sold off (dollars). Those (traders) who did not trim their long dollar (position) are the ones who likely did today (Monday)."

The dollar index remained steady Monday. At 1530 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 99.58, little changed from 99.59 Friday but up from 99.29 Thursday.

However, rise in the rupee was limited as importers purchased the greenback to meet their month-end payment obligations, dealers said. Some importers also bought dollars to take advantage of the lucrative dollar/rupee levels, dealers said. Some banks purchased dollars fearing an escalation of an already strenuous relation between India and Pakistan, which weighed on the rupee, dealers said. 

India announced several measures on Pakistan in retaliation to the terrorist attack in Pahalgam Tuesday, which killed 26 civilians and injured many. The US State Department said Sunday Washington was in touch with Islamabad and New Delhi and urged towards a "responsible solution". Meanwhile, China announced support to its close-ally Pakistan, which further escalated tensions in the South Asian region. 

A few dealers speculated that some public-sector banks stepped in to buy dollars, likely on behalf of the Reserve Bank of India, to prevent a sharp upward movement when the rupee rose above 85.00 a dollar.  

FORWARDS 

Dollar/rupee forward premiums ended higher across tenors Monday, with the one-year premium settling near a three-week high due to a fall in the benchmark US Treasury yield, dealers said. Some importers also purchased forward dollars, which lifted forward premiums further, dealers said.

However, most market participants refrained from buying or selling forward dollars in large quantum due to uncertainty around the US-China tariff war, dealers said. The ongoing tariff situation between the US and China made market participants uncertain about the trajectory of dollar/rupee forward premiums, dealers said.

At 1530 IST, the premium on the one-year exact-period dollar/rupee forward contract was 195.00 paise, up from 183.41 paise Friday. On an annualised basis, the premium was at 2.29%, higher than Friday's close of 2.15%.

OUTLOOK

On Tuesday, the rupee is expected to be supported by foreign fund inflows into Indian financial markets, dealers said. "The fund inflow will likely continue tomorrow (Tuesday) as well and move the rupee upward, until RBI comes and caps the gains," a dealer at a brokerage firm said. Dealers also expect importers to continue purchasing the greenback in order to meet their month-end payment requirements, which may weigh on the rupee. 

Market participants will closely watch any developements in the geopolitical front between India and Pakistan. Traders await more clarity on trade policies by the US and a possible de-escalation in the strained relationship between the US and China. The rupee will also take cues from the movement of the dollar index and the Chinese yuan. 

During the day, the rupee is seen moving between the range of 84.90 and 85.50 against the dollar. Dealers see strong technical resistance for the rupee at 84.95 a dollar. 

India Rupee - World FX: Australian dollar dn despite China's stimulus steps

MUMBAI – The Australian dollar was down 0.3% against the US dollar on Monday despite Beijing announcing measures to support its industries. Over the weekened, China's Finance Minister Lan Fo'an said China would "adopt more proactive macroeconomic policies" to promote economic growth and "continue to bring stability and momentum to the global economy". Any change in the Chinese economy directly impacts the Australian currency. 

Tracking losses in the Australian unit, the New Zealand dollar was down 0.3% against the greenback. The Japanese yen traded flat against the greenback. The Bank of Japan is scheduled to meet for its monetary policy meeting on Thursday, where the central bank is widely expected to hold benchmark lending rates steady amid heightened uncertainties over tariff policies by the US. 

The pound sterling was up 0.1% against the dollar, while the euro was down 0.1%. The dollar index remained steady Monday. At 1446 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 99.64, slightly higher than 99.59 Friday and 99.29 Thursday. The Swiss franc was down 0.3%. 

The Canadian dollar was down 0.1% against the US currency. Canadians will cast votes to elect their new government later in the day amid the ongoing strained relationship with the US, its largest trading partner and neighbour. Mark Carney replaced erstwhile Prime Minister Justin Trudeau on Mar. 9.  (Gowri Lakshmi) 

India Rupee: Sharply up as traders trim long dlr bets, FX inflows support

MUMBAI – The rupee rose sharply against the dollar, coming off the day's low, as traders trimmed their long dollar positions due to the sustained weakness of the dollar, dealers said. Foreign fund inflows, especially into the domestic stock market, also supported the Indian unit, they said. The rupee touched a high of 85.1600 a dollar earlier in the day.

"More than FPIs, I think right now it's more related to sell-off from traders due to which the rupee shot up from earlier levels," a dealer at a private sector bank said. Noting the sharp rise in the rupee, supported by continued foreign fund inflows, some exporters sold dollars to take advantage of the relatively higher dollar/rupee levels, dealers said. 

The rupee was supported due to foreign fund inflows into the domestic stock market and the government bond market, dealers said. At 1302 IST, the benchmark stock indices, the Nifty 50 and the BSE Sensex, were sharply up by 1.3% each. So far in April, foreign portfolio investors bought $91 million worth of shares from Indian equities. 

However, as soon as the rupee touched the day's high, importers rushed to purchase dollars to take advantage of the lucrative dollar/rupee levels and to meet their month-end payment obligations. This capped a further rise in the rupee, dealers said. Rising worries over India-Pakistan relations also weighed on the rupee, pulling the Indian unit to its day's low of 85.4225 a dollar earlier in the day, dealers said.

"The geopolitical tension with Pakistan is definitely capping gains (of the rupee) ... there is caution around the issue and speculators are now building positions (buying dollars) based on the latest developments," a currency trader at another private sector bank said. 

India has struck Pakistan with a slew of measures in retaliation to the terrorist attack at Pahalgam on Tuesday, which killed 26 civilians and injured many. The US State Department said Sunday Washington was in touch with both New Delhi and Islamabad and urged them to work towards a "responsible solution". Meanwhile, China on Sunday vowed to support its close-ally Pakistan in safeguarding its sovereignty and national interest, further escalating worries in the South Asian region. 

The dollar index remained steady Monday. The index, which measures the strength in the dollar, against a basket of six major currencies, was at 99.74, little changed from 99.73 Friday and 99.69 Thursday. 

For the rest of the day, the rupee is seen moving between 85.10 and 85.60 a dollar. Dealers see strong technical resistance for the Indian unit at 85.10 a dollar.  (Gowri Lakshmi)

India Rupee: Technical levels for rupee - Apr 28

MUMBAI – At 1018 IST, the rupee was at 85.3450 per dollar. At 0900 IST, the rupee was at 85.3050 a dollar, against the previous close of 85.4500. 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: Mixed as mkts await clarity on US-China tariff issues

MUMBAI - Asian currencies were mixed against the dollar in early trade Monday as investors remain watchful of developments in the US-China trade issues. The dollar index remained steady, with investors still uncertain of the impact of US President Donald Trump's tariffs on his country's economy.

The University of Michigan consumer sentiment index declined in April to 52.2 from 57 in March, which reflects worries over economic outlook amid tariff issues. 

Market participants keenly wait for multiple data releases from the US this week, including the jobs data for the current month, to gauge the health of the US economy. The dollar index, which measures the strength of the greenback against a basket of six major currencies, was at 99.65, slightly up from 99.59 Friday and 99.29 Thursday.

Investors remained uncertain of trade developments between the US and China due to conflicting signals from both the countries. While Trump said in an interview published Friday that tariff negotiations with China were underway, the President separately said he would not reduce tariffs on China unless the Asian nation offered "something substantial" in return.

The Taiwan dollar was up 0.1% against the greenback, supported by a rise in its domestic stock index, The Taiwan Stock Exchange Capitalization Weighted Stock Index, that was up over 0.6% in early trade Monday. The South Korean won rose 0.1% against the greenback. 

The Philippines peso was down 0.1% against the greenback after the country's central bank governor said its periodic intervention in its currency market is aimed to control the inflationary pressure from a weaking currency, rather than to manage capital flows.

The Indonesian rupiah and the Thai baht were down 0.2% and 0.4%, respectively, against the greenback. The Malaysian ringgit was steady against the US currency.  (Sourabh Kumar)

India Rupee: Higher on FX inflows; importers' dollar buys cap gains

MUMBAI – The rupee was higher against the dollar Monday, likely due to foreign fund inflows into domestic equities, dealers said. However, importers purchased the greenback, erasing some of the early gains, dealers said. The rupee touched a high of 85.2875 a dollar in early trade. 

"I think this is mostly on FX (foreign exchange) inflows. In the morning, flows may have hit the GIFT-city, so the rupee may have taken support from there," a currency trader at a private sector bank said. "Despite tension around India-Pakistan going on, the rupee is driven by flows largely." 

Later in the day, the rupee is likely to be supported by foreign fund inflows into initial public offerings of Indian companies, dealers said. Ather Energy Ltd.'s offering opened for subscription on Monday and will close on Wednesday. "I think Ather may attract some flows," another dealer at a state-owned bank said. "Some $300 million is expected to come, it may not have significant market moving impact, but it should support the rupee at least." 

Importers also purchased dollars to meet their month-end payment obligations, dealers said. This pulled the rupee quickly lower to 85.4225 against the greenback. "Its a buy on dips market, with month-end coming importers will come at every level," the dealer at the private sector bank said. "If the rupee comes to 20 (85.20) something levels again, then importers will rush in."

The dollar index remained steady on Monday. At 0930 IST, the index, which measures the strength of the dollar against a basket of six major currencies, was at 99.63, slightly higher than 99.59 Friday and 99.89 Thursday. 

During the day, the rupee is seen moving between 85.25 and 85.50 a dollar. Dealers see strong technical resistance for the Indian unit at 85.25 a dollar.  (Gowri Lakshmi)

India Rupee: Expected range for rupee - Apr 28

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 Gowri Lakshmi)

End

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

Edited by Akul Nishant Akhoury

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