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Informist, Monday, Jun. 9, 2025

By Gowri Lakshmi

MUMBAI – The rupee pared all the losses from earlier in the day and ended steady against the dollar Monday as foreign banks' dollar sales, likely for foreign fund inflows, offset the negative impact of importers' dollar purchases, dealers said. A few exporters also sold the greenback in early trade, which supported the rupee, according to some dealers. Volume in the currency market was lower than usual due to lack of significant cues, dealers said. 

After falling to 85.7175 against the greenback, the Indian unit settled at 85.6300 a dollar, little changed from its previous close of 85.6250. The Indian currency moved in a range of nearly 25 paise during the day. 

"I think the policy meeting by RBI (Reserve Bank of India) this time was very much growth-oriented. This attracted FPIs (foreign portfolio investors) and pretty much explains the flows," a dealer at a state-owned bank said. "But some importers are there, especially oilers, were bidding since morning." 

Other Asian currencies were mixed on Monday as investors awaited details of the US-China trade talks, scheduled for later in the day in London. Other Asian currencies moved between 0.1-0.7%, with the South Korean won gaining the most, while the Philippine peso was the worst hit in the region.

The rupee started the day steady as well, at 85.6400 a dollar as banks' dollar purchases for oil marketing companies and other importers offset banks' dollar sales for exporters, dealers said. Exporters sold dollars when the rupee was trading around 85.68-85.70 a dollar, to take advantage of the relatively higher dollar/rupee levels in early trade, dealers said.

"Some selling (of dollars) immediately came in after the market opened, probably exporters thought this was a higher level, as flows and even intervention (by the Reserve Bank of India) wouldn't let rupee touch 86 (a dollar) soon," the dealer at the state-owned bank said. However, persistent dollar demand from importers pushed the rupee to the day's low of 85.7175 against the greenback within the first hour of trading. 

Oil marketing companies rushed to purchase the greenback fearing a further rise in crude oil prices, dealers said. On Friday, crude prices ended 1% higher after the recent jobs data from the US and the easing US-China trade tensions sparked hopes of growth and strong demand from two of the world's largest economies.

At 1530 IST, the August Brent crude contract on the Intercontinental Exchange was at $66.80 per barrel, tad up from $66.47 per barrel Friday, and up from $65.34 per barrel Thursday. Dealers expect crude oil prices to trade between $66.00-$70.00 per barrel in the near term.  

Some importers also purchased the greenback, fearing a further fall in the rupee. Despite the dollar demand, exporters' dollar sales coupled with some likely foreign fund inflows limited the rupee's fall, and lifted the rupee to the day's high of 85.4700 a dollar.

The rupee was able to pare all losses and rise against the dollar as a few foreign banks, including one from the UK and another from the US, sold the greenback on behalf of overseas investors who wanted to invest in the domestic stock market and other financial markets. Both the benchmark indices, the Nifty 50 and the BSE Sensex, ended higher by 0.4% and 0.3%, respectively. Dealers said the inflows were, however, not as large in quantum as it used to be and the implications on the dollar/rupee levels were simply because of dull volume in the currency market. 

The dollar index remained steady Monday after rising Friday on the back of higher-than-expected US non-farm payrolls data. Non-farm payrolls for May rose by 139,000 jobs after a downwardly revised rise of 147,000 in April. Economists had estimated jobs to rise by 130,000 in a Reuters poll. Meanwhile, the unemployment rate in the US was steady at 4.2% for the third consecutive month. 

At 1530 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 98.97, broadly steady from 99.20 Friday and 98.71 Thursday. 

FORWARDS 

The one-year dollar/rupee forward premium ended at an 11-month low Monday after the higher-than-expected US employment data dampened expectations of rate cuts by the US Federal Reserve, dealers said. Forwards of a currency pair are reflective of the interest rate differential between the two countries.

Forward premiums had fallen sharply on Friday after the Reserve Bank of India's Monetary Policy Committee opted for a higher-than-expected repo rate cut of 50 basis points to 5.50%. Meanwhile, some banks rushed to buy dollars for forward delivery on behalf of importers, noting the fall in levels, which limited losses for the forward premiums, dealers said. 

At 1530 IST, the exact-period dollar/rupee forward contract was 152.28 paise, against 156.10 paise at Friday's close. On an annualised basis, the premium ended at 1.77%, against the previous close of 1.82%.

OUTLOOK

On Tuesday, the rupee may receive support from expected foreign fund inflows into domestic equities, dealers said. Market participants will closely assess the details of the US-China trade talks, due later in the day, dealers said. The Indian unit will also take cues from the movement in the dollar index and crude oil prices, they said. 

The rupee may come under pressure as importers could purchase the greenback, wary of a further rise in crude prices, dealers said. Should the rupee fall below 86.00 a dollar, dealers expect the RBI to intervene through dollar sales, to prevent the rupee from falling sharply, dealers said. The rupee is expected to trade between 85.50 and 86.00 against the dollar Friday. Dealers peg key technical support at 85.90 against the greenback. 

India Rupee - World FX: Euro up; German chancellor eyes trade deal with US

MUMBAI – The euro rose 0.3% against the greenback Monday as investor sentiment improved after German Chancellor Freidrich Merz said over the weekend that he would pursue a deal with the US under which US cars would be imported into Europe without any duties in exchange for tariff waivers on the same number of vehicles exported to the US. "We have to see if we can come up with an offset rule or something along those lines," Merz said speaking at Berlin.

The dollar remained broadly steady Monday after rising Friday as the recent jobs data reinforced that the US labour market may still be in a solid state despite the tariff uncertatines. On Friday, the US' non-farm payrolls increased by 139,000 jobs in May, higher than the analyst estimate of 130,000 jobs in a Reuters poll. The jobs data for April was downwardly revised to a rise of 147,000 and payrolls count for March was slashed by 65,000 to 120,000. 

At 1530 IST, the dollar index, which measures the strength in the dollar against a basket of six major currencies, was at 98.89, broadly steady from 99.20 Friday and 98.71 Thursday. 

The Australian dollar and the New Zealand dollar rose 0.6% and 0.7%, respectively, as trade friction between the US and China eased. Beijing has granted temporary export licences for rare earth supplies of top three US automakers while Boeing Co. has resumed the deliveries of commercial jets to China after being halted abruptly in April. US-China trade talks is scheduled later in the day in London. Any change in the Chinese economy directly impacts the currencies of Australia and New Zealand due to their close bilateral trade relations. 

The Japanese yen was up 0.6% against the greenback after data released earlier in the day showed the country's economy contracted at a slower pace than expected earlier, fuelled by an upward revision in consumption figures. Japan's GDP shrank 0.2% on an annual basis in the March quarter, against a previously estimated 0.7% announced in May.

The pound sterling was up 0.4% against the greenback while the Canadian dollar was up 0.1%. The Swiss franc rose 0.3% against the US currency.  (Gowri Lakshmi)

India Rupee: Tad up on likely foreign fund inflows; volumes remain dull

MUMBAI – The rupee erased all losses from earlier in the day and rose slightly against the greenback as banks sold dollars, likely for foreign fund inflows, dealers said. However, some importers purchased the greenback, limiting the rise of the Indian currency, dealers said. Volume in the currency market was in a thin band, owing to a lack of significant cues, they said.

"There are flows, but inflows aren't in large quantity, but since volumes are cold, even small flows are largely being reflected in the levels," a dealer at a private sector bank said. The rupee was supported as a few foreign banks, including a UK-based one, sold the greenback on behalf of foreign portfolio investors, who were looking invest in domestic financial markets, dealers said. At 1300 IST, the benchmark indices, the Nifty 50 and the BSE Sensex, were up 0.4%. 

Earlier in the day, a few exporters sold the greenback when the rupee was trading around 85.65-85.70 a dollar, in order to take advantage of the relatively higher dollar/rupee levels, dealers said. This provided some cushion to the rupee, according to some dealers. The rupee had touched a low of 85.7175 a dollar in early trade. 

Gains in the rupee were capped as some importers purchased the greenback, fearing a further fall in the Indian unit, dealers said. However, they said most importers remained on the sidelines, expecting the rupee to rise further. "I think importers are there but they are very passive. Most are waiting for 85.30 (a dollar) levels," the dealer at the private sector bank said. 

The dollar index continues to remain steady. The index rose Friday after robust non-farm payrolls data diminished worries over a softening US labour market. At 1300 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 98.95, broadly steady from 99.20 Friday and 98.71 Thursday. 

For the rest of the day, the rupee is seen moving in the range of 85.40 and 85.80 against the greenback. Dealers peg key technical resistance for the rupee at 85.45 a dollar.  (Gowri Lakshmi)

India Rupee: Forward premium hits near 11-month low post upbeat US jobs data

MUMBAI - The one-year dollar/rupee forward premium hit a near eleven month low on Monday after a higher-than-expected US employment data dampened expectations of rate cuts by the US Federal Reserve, dealers said. Forwards of a currency pair are reflective of the interest rate differential between the two countries.

Labor Department data showed that employers in the US added 139,000 jobs in May, less than the 147,000 jobs added in April, but exceeding the 130,000 gain forecast in a Reuters poll. Following the upbeat non-farm payrolls data, the yield on the benchmark US 10-year Treasury note jumped Friday, weighing on forward premiums. 

"Recieving came just after the market opened due to the interest rate differential view," said a dealer at a private bank. "After the RBI policy there has been a lot of recieving in the market. This should continue given what is happening in the US also."

Forward premiums had fallen sharply on Friday after the Reserve Bank of India's Monetary Policy Committee opted for a higher than expected repo rate cut of 50 basis points to 5.50%. The central bank also cut the Cash Reserve Ratio by 100 bps to 3% of banks' net demand and time liabilities. The CRR reduction, to be effected in four tranches of 25 bps each, is expected to infuse liquidity to the tune of INR 2.5 trillion into the banking system by December.

Market participants now expect the dollar/rupee forward premiums to fall further in the coming months, with the one-year tenure expected to decline to as low as 1.60%. A faster cut in India's interest rates compared to the US would ensure the spread rates narrow, dealers said.

Meanwhile, some banks rushed to buy dollars for forward delivery on behalf of importers, noting the fall in levels, which limited losses for the forward premiums, dealers said. The one-year dollar/rupee forward premium fell to 1.78% during the day, its lowest level since Jul. 26. "Importers have been paying at these low levels, since these are pretty lucrative," said a dealer at a state-owned bank. 

Market participants now await the US consumer price index for May due Wednesday to get more cues about the Federal Reserve's interest rate trajectory. At 1220 IST, the premium on the one-year, exact-period dollar/rupee forward contract was 153.78 paise, against 156.10 paise at Friday's close. On an annualised basis, the premium was at 1.80%, against the previous close of 1.82%. (Pratiksha)

India Rupee: Technical levels for rupee - Jun 9

MUMBAI – At 1037 IST, the rupee was at 85.6425 per dollar. At 0900 IST, the rupee was at 85.6400 a dollar, against the previous close of 85.6250. Following are the key support and resistance levels for the rupee as provided by leading banks and brokerages:

(Gowri Lakshmi)

India Rupee - Asia FX: Mixed; investors eye US-China talks later in the day

MUMBAI – Asian currencies began the week on a mixed note ahead of the trade talks between Washington and Beijing, due later in the day. Trade tensions between the US and China eased and Beijing has granted temporary export licences for rare earth supplies of top three US automakers while Boeing Co. has resumed the deliveries of commercial jets to China after being halted abruptly in April. 

The Chinese yuan was up 0.1% against the greenback, after data published earlier in the day showed China's trade surplus widened as growth in exports outpaced that of imports. Exports rose by 4.8% on year in May while imports dropped by 3.4% on year. China's trade surplus advanced to $103.22 billion in May, up from $96.18 billion the month prior. 

The dollar index inched up Friday after stronger-than-expected US non-farm payrolls data. Data released Friday showed wages continued to grow and US non-farm payrolls increased by 139,000 jobs in May, higher than the analyst estimate of 130,000 jobs in a Reuters poll. Data also showed the jobs data for April was downwardly revised to a rise of 147,000 and payrolls count for March was slashed by 65,000 to 120,000. 

At 1000 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 99.01, broadly steady from 99.20 Friday and 98.71 Thursday. The Malaysian ringgit was down 0.2% while the Indonesian rupiah was down 0.1% against the greenback. 

The Philippine peso fell 0.2% against the US currency and the Taiwan dollar was down 0.1%. The Thai baht traded flat against the greenback. Data released Friday showed Thailand's headline consumer price index fell 0.57% in May after an annual decrease of 0.22% the month prior. The inflation print was below the analyst estimate of 0.8% fall in a Reuters poll and the central bank's target of 1-3%. The Core Consumer Price Index rose 1.09% in May. 

Further, Poonpong Nayianapakorn, head of the ministry's Trade Policy and Strategy Office, said a positive inflation reading is expected in June. The ministry cut the full-year inflation forecast to 0-1% from 0.3-1.3% projected earlier. 

The South Korean won rose 0.3% and was supported by gains in the domestic stock market, with the benchmark index KOSPI rising 1.7% in early trade. South Korean President Lee Jae-myung Monday called for plans to stabilise prices and said the increase in cost of living was "too much pain." "Prices are causing too much pain for the people, so please check the current situation and see if there are any possible measures and report them even before the next meeting," Lee said.  (Gowri Lakshmi)

India Rupee: Tad down on oil cos' dlr buys; exporters' dlr sales limit fall

MUMBAI - The rupee was slightly down against the dollar Monday as banks purchased the greenback on behalf of oil marketing companies and other importers, dealers said. However, dollar sales by a few exporters and likely foreign fund inflows limited the fall of the Indian currency, dealers said.

The rupee came under pressure as importers rushed to purchase the greenback, wary of a sharp fall in the rupee, dealers said. Oil marketing companies also purchased the greenback in large quantum, fearing a further rise in crude oil prices, they said. Crude oil prices ended over 1% higher Friday after

Crude prices rose over $1 per barrel Friday after robust US jobs data and de-escalation of trade conflict between the US and China reinforced hopes of growth and demand from two of the world's largest economies. 

At 0939 IST, the August Brent crude contract on the Intercontinental Exchange was at $66.43 per barrel, little changed from $66.47 per barrel Friday, and up from $65.34 per barrel Thursday. 

"Investors are eyeing US-China talks. China is the biggest market for crude oil and if the talks go smooth, there will be positive sentiment around growth and demand," a dealer at a state-owned bank said. "I think crude should trade between $68-$70 per barrel in near term." Washington and Beijing are scheduled to hold trade talks later in the day. 

However, the rupee was supported as some exporters sold the greenback to take advantage of the relatively lucrative dollar/rupee levels, dealers said. "Some selling is there by exporters in the morning; ideally post RBI (Reserve Bank of India) policy the rupee was not expected to rise, but I think they (exporters) don't see rupee falling as much or as fast as they thought," a dealer at a private sector bank said.

The Monetary Policy Committee of the RBI reduced the repo-rate by a jumbo 50 basis points. The rate-setting panel of the central bank also cut the cash reserve ratio by 100 bps to 3.0% of the bank's net demand and time liabilities and changed changed its policy stance to 'neutral' from 'accommodative'. 

Dealers said likely foreign fund inflows into the domestic stock market also provided some cushion to the rupee. At 0942 IST, the benchmark indices, the Nifty 50 and the BSE Sensex were up 0.4% each. Dealers also expect foreign fund inflows to continue and pick traction later in the day, which may lift the rupee. 

The dollar index remained steady in early trade after rising Friday. The index rose Friday as US non-farm payrolls for May rose by 139,000 jobs after a downward revised rise of 147,000 in April. In a Reuters poll, economists had estimated jobs to rise 130,000. Meanwhile, the unemployment rate stood steady at 4.2% for the third consecutive month. 

At 0944 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 99.03, broadly steady from 99.20 Friday and 98.71 Thursday. 

For the rest of the day, the rupee is seen moving in a range between 85.50 and 86.10 against the dollar. Dealers peg key technical support for the rupee at 85.90 per dollar.  (Gowri Lakshmi)

India Rupee: Expected range for rupee - Jun 9

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:

(Gowri Lakshmi)

End

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

Edited by Tanima Banerjee

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