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Informist, Wednesday, Jun. 11, 2025

By Sourabh Kumar

MUMBAI – The rupee ended higher against the dollar on Wednesday as foreign banks sold dollars, likely on behalf of their overseas clients who invested in Indian equities, dealers said. The rise was, however, capped because importers purchased the greenback at relatively lower dollar/rupee rates, dealers said.

"Foreign banks were selling for equities, and some state-owned banks were buying today (Wednesday)," a dealer with a brokerage firm said. After moving in a relatively narrow range of around 14 paise Wednesday, the Indian currency settled at 85.5100 a dollar, up from Tuesday's close of 85.6025 a dollar. The Nifty 50 and BSE Sensex closed 0.2% higher each, on Wednesday. 

The rupee's intraday range Wednesday was the narrowest in over seven weeks. The rupee opened higher against the dollar as some foreign banks had been selling the greenback since morning, likely for foreign fund inflows into domestic equities, dealers said. It lifted the Indian unit to 85.4175 a dollar Wednesday, the highest level in over a week.

As the rupee rose to the day's high, importers stepped in to purchase dollars, dealers said. Oil marketing companies were the largest group of importers who purchased the greenback on Wednesday, according to dealers. Overall, state-owned banks bought the most dollars, as per dealers. "State-owned banks were there, likely for defence-related buying and oilers," a dealer with a foreign bank said. 

Importers purchased the greenback at relatively lower dollar/rupee rates, as they anticipated the Indian currency to come under pressure going ahead, dealers said. "For importers, 85.40-85.45 a dollar is a very good level to buy (dollars), because they are thinking the rupee may fall amid the global trade uncertainty," a dealer with a state-owned bank said. 

While there was some optimism in the currency market after the US and China agreed on a trade framework, resolving China's curbs on exports of rare earth materials, and easing tariffs on each other, most dealers said market participants were still unsure of the outcome. US Commerce Secretary Howard Lutnick and China's Trade Representative Li Chenggang confirmed that the two countries had arrived at a framework to ease tariffs on each other. 

"We have reached a framework to implement the Geneva consensus and the call between the two presidents," Lutnick said. "The idea is we're going to go back and speak to President Trump and make sure he approves it. They're going to go back and speak to President Xi and make sure he approves it, and if that is approved, we will then implement the framework." He indicated US restrictions on sales of advanced tech to China in recent weeks would be rolled back as Beijing approves rare earths exports.

While importers rushed to purchase dollars Wednesday, exporters were looking for relatively higher dollar/rupee rates and refrained from selling the greenback in large quantum, dealers said. Most exporters waited for the rupee to fall over 85.80 a dollar before they sold large amount of dollars, dealers said. 

Oil marketing companies, who were likely one of the major buyers of dollars Wednesday, bought the greenback on fear that oil prices may increase further, dealers said. At 1530 IST, the August Brent Crude contract on the Intercontinental Exchange was at $67.60 per barrel, up from $66.87 per barrel Tuesday, and $67.04 per barrel Monday.

Meanwhile, the dollar index, which measures the strength of the greenback against a basket of six major currencies, was steady. The index was 99.02 at 1530 IST, unchanged from Tuesday and little changed from 99.03 Monday. The dollar index remained largely steady ahead of the release of the US CPI data, due later in the day. It could be a "trigger" for the dollar index to move higher or lower, dealers said.

The dollar index has remained around 99 for a few weeks now, albeit rising to 100 and falling towards 98 briefly. The US CPI is expected to rise 0.2% on month in May, as per a poll by Dow Jones. Annually, it is projected to rise 2.4%. 

FORWARDS 

The one-year dollar/rupee forward premium ended higher Wednesday as some importers purchased forward dollars, in anticipation that the rupee may come under pressure going ahead, dealers said. Market participants await the release of the US CPI data, which could provide some clarity over the movement of interest rates in the US.

Market participants also await details on the US-China trade framework. US Commerce Secretary Lutnick and China's Trade Representative Chenggang confirmed that the two countries had arrived at a framework to ease tariffs on each other.

A positive outcome for both countries could mean that the tariff war between the two countries could ease, thereby bringing down inflation in the US, paving the way for interest rate cuts by the US Federal Reserve. Since the forwards of a currency pair are reflective of the interest rate differential between the two countries, it may restrict the fall of premiums, dealers said.

At 1530 IST, the exact-period dollar/rupee forward contract was 158.00 paise, up from 155.25 paise at Tuesday's close. On an annualised basis, the premium ended at 1.84%, up from the previous close of 1.81%.

OUTLOOK

On Thursday, the rupee may receive support from expected foreign fund inflows into domestic equities, dealers said. Market participants will keep an eye on further developments related to the US-China trade relations, dealers said. The Indian unit will also take cues from the movement in the dollar index and crude oil prices, they said. 

Rising crude oil prices may limit the rise in the rupee, dealers said. Since crude is a major commodity India imports, a rise in its price puts pressure on the nation's import bill, thus weighing on the domestic currency.

However, in case of a sharp fall in the rupee, dealers expect the RBI to intervene in the foreign exchange market by selling dollars. The rupee is expected to trade between 85.40 and 85.80 against the dollar Thursday. Dealers peg key technical resistance at 85.50 against the greenback. 

India Rupee - World FX: Dlr steady before US CPI; commodity currencies down

MUMBAI – The dollar index was steady ahead of the release of the US CPI data, due later in the day. The index, which measures the strength of the greenback against a basket of six major currencies, was 99.04 at 1416 IST against 99.05 Tuesday and 99.00 Monday. US CPI is expected to have risen 0.2% on month in May, as per a poll by Dow Jones. Annually, it is projected to rise 2.4%.

The Japanese yen was down 0.1% against the dollar. The Bank of Japan is expected to keep the benchmark rates unchanged at 0.5% this year due to uncertainty around global trade, as per a poll by Reuters. This weighed on the yen. The poll shows economists expects the next rate hike to be in early 2026.

The euro was up 0.1% against the greenback. However, the rise was capped as European Central Bank Governing Council member Martins Kazaks said in an interview that more rate cuts may be needed. "What the market was pricing — one more cut or something like that — is not out of the realm of the baseline," the Latvian central banker said in an interview to Econostream.

The pound sterling was down 0.1% against the greenback as data showed labour market in the UK remained weak. Unemployment rate accelerated to 4.6% in May, the highest level seen since Jul. 2021. Also, labor demand slowed significantly, and wages grew at a moderate pace. Soft UK employment data has increased market expectations that the Bank of England will reduce interest rates by more than what investors had projected earlier, leading to a fall in the currency.

The commodity currencies, including the Australian, New Zealand, and Canadian dollars, declined against the dollar on Wednesday due to a fall in crude oil prices. China's weak oil demand and production increases in the Organization of Petroleum Exporting Countries and allies led to a fall in prices of oil, which led to a fall in these currencies. The Canadian dollar, Australian dollar, and New Zealand dollar are known as commodity currencies due to their nations' reliance on the export of oil, gold, and agricultural products. (Sourabh Kumar and Kabir Sharma)

India Rupee: Premium steady ahead of US CPI; importers' fwd dlr buys support

MUMBAI – The one-year dollar/rupee forward premium was steady Wednesday ahead of the release of US CPI data later in the day, dealers said. Market participants refrained from buying or selling forward dollars in large quantums, dealers said. Consequently, overall volumes were lower Wednesday, dealers said.

"Even premiums are moving in a tight range. Volumes are also low because people are waiting for a trigger right now," a dealer with a foreign bank said. However, some importers purchased forward dollars on anticipation that the rupee could come under pressure amid global trade uncertainty, dealers said. This supported premiums, dealers said.

US CPI is expected to have risen 0.2% on month in May, as per a poll by Dow Jones. Annually, it is projected to rise 2.4%. If consumer prices rise more than expectation, dealers expect the dollar/rupee forward premium to fall slightly, as a higher than expected US CPI may weigh on chances of a rate cut in the US.

Market participants await details on the US-China trade framework. US Commerce Secretary Howard Lutnick and China's trade representative Li Chenggang confirmed that the two countries had arrived at a framework to ease tariffs on each other. 

"We have reached a framework to implement the Geneva consensus and the call between the two presidents," Lutnick said. "The idea is we're going to go back and speak to President Trump and make sure he approves it. They're going to go back and speak to President Xi and make sure he approves it, and if that is approved, we will then implement the framework." He indicated US restrictions on sales of advanced tech to China in recent weeks would be rolled back as Beijing approves rare earths exports.

At 1348 IST, the one-year exact-period dollar/rupee forward premium was 155.71 paise, not much changed from 155.25 paise Tuesday, but higher than 152.28 paise Monday. On an annualised basis, the premium was 1.81%, unchanged from Tuesday, but higher than 1.78% on Monday.  (Sourabh Kumar)

India Rupee: Erases most gains as importers buy dollars; FX inflows support

MUMBAI – The rupee erased most of its gains against the dollar due to importers' continued dollar purchases, as they anticipated the Indian currency could fall further, dealers said. While overall volume in the foreign exchange market improved from the last two days, it was still lower-than-usual, as per dealers.

"There is buying (of dollars) from importers, largely oil companies, and the expectation is that the rupee may fall to about 60 (85.60 a dollar) today," a dealer with a state-owned bank said. However, the fall of the Indian currency was limited as some foreign banks were seen selling dollars, likely on behalf of their overseas clients for investment in Indian equities, dealers said. Nifty 50 and BSE Sensex were 0.4% higher at 1258 IST.

Importers purchased dollars as they anticipated that the rupee may fall on the back of uncertainty in global trade, dealers said. While there has been some positivity in the market after a framework agreement between the US and China resolved the latter's curbs on exports of rare earth materials, market participants were still unsure of a durable trade deal between them. They are waiting for more details from either side. 

The dollar index inched slightly up, which weighed on the Indian currency, dealers said. The dollar index, which measures the strength of the greenback against a basket of six major currencies, was 99.18 at 1305 IST, tad up from 99.05 Tuesday, and 99.00 Monday. Market participants now look forward to the release of US CPI data, due later in the day. 

Crude oil prices were higher, which also weighed on the Indian currency, dealers said. In anticipation of a further rise in crude oil` prices, oil marketing companies purchased the greenback, which also put pressure on the Indian rupee, dealers said. At 1309 IST, the August Brent Crude contract on the Intercontinental Exchange was at $67.01 per barrel, up slightly from $66.87 per barrel Tuesday, and steady from $67.04 per barrel Monday.

During the day, the rupee is seen moving in a range of 85.40 and 85.60 against the dollar. Dealers peg key technical resistance for the Indian unit at 85.40 per dollar. (Sourabh Kumar)

India Rupee: Technical levels for rupee - Jun 11

MUMBAI – At 1143 IST, the rupee was at 85.4650 per dollar. At 0900 IST, the rupee was at 85.5100 a dollar, against the previous close of 85.6025. Following are the key support and resistance levels for the rupee as provided by leading banks and brokerages:

(Gowri Lakshmi and Pratiksha)

India Rupee: Up as bks sell dlrs for FX flows into equities; US May CPI eyed

MUMBAI – The rupee was higher against the dollar in early trade Wednesday as banks sold dollars for foreign fund flows into Indian equities, dealers said. "There was a gap-up opening because the World Bank said India will remain the fastest growing economy, which has led to some inflows in the market early today," a dealer at a state-owned bank said. 

The World Bank Tuesday cut its forecast for India's GDP growth in 2025-26 (Apr-Mar) to 6.3% from 6.7% forecast in January, but it still expects India to maintain the fastest growth rate among the world's large economies. At 0924 IST, the Nifty 50 and the Sensex were up 0.1% each. 

Dealers said the US-China trade framework also provided positive sentiment for the Indian rupee, even as it led to a slight increase in the dollar index. "This gives hope that a trade deal for us might be coming soon," a dealer at a foreign bank said. US Commerce Secretary Howard Lutnick and China's trade representative Li Chenggang confirmed that the two countries had arrived at a framework to ease tariffs on each other. 

For futher cues on the greenback's movement, market participants await the release of US CPI data for May, due later in the day. "The US CPI is extremely crucial as almost everyone is pricing a pause at the next meeting. However, if the data surprises on the downside, bets of a cut will come into play," a dealer at a state-owned bank said. 

A poll by Dow Jones showed the May CPI inflation print is estimated at 2.4% on year, against 2.3% in April, and core CPI is expected to have risen 2.9% on year, against 2.8% the previous month. 

During the day, the rupee is seen moving in a range of 85.40 and 85.70 against the dollar. Dealers peg key technical resistance for the Indian unit at 85.45 per dollar. (Kabir Sharma)

India Rupee - Asia FX: Most dn as US-China trade framework strengthens dlr

MUMBAI – Most Asian currencies were down against the dollar as the greenback strengthened after the US and China agreed to a trade framework to alleviate the pain caused by tariffs imposed by the two countries on each other. The dollar also remained firm ahead of US CPI data for May, due later in the day. 

US Commerce Secretary Howard Lutnick informed reporters that the framework added "meat on the bones" to the agreement reached in Geneva last month to alleviate retaliatory tariffs and China's restrictions on essential mineral exports. The agreement would also eliminate certain recent US export limitations, he said. 

The South Korea won was down 0.2% against the dollar. The country is taking steps to allow private companies to create stablecoins tied to the Korean won, digital currencies that uphold a consistent value aligned with the national currency. On Jun. 10, the Democratic Party in power suggested a bill allowing companies to issue stablecoins for everyday transactions instead of the Bank of Korea. Since won-based stablecoins were promised during President Lee Jae-myung's campaign, the legislation is expected to succeed, according to media reports. 

The Malaysian ringit was down 0.1% against the dollar as the greenback remained firm. The ringgit was also trading lower due to caution ahead of the Malaysia Palm Oil Board's crucial supply and demand data. Malaysia contributes to over 29% of global palm oil exports. 

Bucking the trend, the Taiwan dollar rose 0.2% against the greenback as Taiwan Semiconductor Manufacturing Co. on Tuesday reported a 40% year-on-year surge in revenue for May. Global tech gian Nvidia is one of the biggest customers of the company. 

The Thai Baht was down 0.1% against the dollar while the offshore Chinese yuan and the Singapore dollar traded flat against the greenback. At 0832 IST, the dollar index, which measures the strength in the dollar against a basket of six major currencies, was at 99.11, slightly higher than its previous close of 99.05 and 99.00 Monday. (Kabir Sharma)

India Rupee: Expected range for rupee - Jun 11

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

(Gowri Lakshmi, Pratiksha, Sourabh Kumar and Kabir Sharma)

End

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

Edited by Tanima Banerjee

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