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Informist, Friday, Jun. 13, 2025

By Sourabh Kumar

MUMBAI – The rupee slumped Friday to end at an over two-month low due to a surge in crude oil prices after Israel attacked Iran's nuclear facilities, dealers said. Fearing a further rise in crude oil prices, oil marketing companies increased their dollar purchases, which weighed on the rupee, dealers said.

"The initial reaction was due to the news of Israel's attack on Iran, so oil companies were there buying (dollars) since morning," a dealer with a foreign bank said. "But, slowly, the panic settled down, and the demand (for dollars from oil marketing companies) decreased."

After moving in a range of 27 paise against the dollar Friday, the rupee settled at 86.0800 against the greenback, down 48 paise from Thursday. This was the rupee's worst performance against the dollar since May 8. The rupee closed 0.6% lower on Friday and fell 0.5% from a week ago.

As reports came in that Israel attacked Iranian nuclear facilities early Friday, "there was buying (dollar) interest before opening (spot market) itself, and the pressure on the rupee started building up since then," a dealer with a state-owned bank said. The rupee opened sharply lower at 86.1375 a dollar Friday against the previous close of 85.60 a dollar.

After opening, the rupee moved lower for some time as oil marketing companies stepped up dollar purchases, dealers said. Since crude oil constitutes a major chunk of India's import basket, a rise in its price raises the import bill and consequently puts pressure on the domestic currency. 

High crude oil prices and increased dollar purchases by oil marketing companies dragged the rupee to an over two-month low of 86.2000 a dollar Friday, dealers said. Other importers also bought the greenback as they feared that a higher crude price may push the rupee further lower, as per dealers.

Some foreign banks purchased dollars likely due to foreign fund outflows from domestic equities, which weighed on the rupee, dealers said. The Nifty 50 and BSE Sensex ended down 0.7% each Friday. 

The fall in the rupee was limited as the Reserve Bank of India likely sold dollars at 86.20 a dollar, the day's lowest for the rupee. Some dealers said the central bank also intervened in the offshore market, bringing the dollar/rupee rates lower before opening. "RBI sold in offshore as well, I think, and then in spot they sold around 86.20 a dollar," a dealer with another foreign bank said. "But the selling in offshore was not aggressive."

However, persistent dollar buying by oil marketing companies kept the rupee under pressure during the initial few hours, dealers said. Oil marketing companies feared crude oil prices might rise more after Israel announced it had targeted Iran, which heightened worries about disruption in oil supply.

Israel launched "preemptive strikes" on Iran early Friday in an attempt to sabotage Tehran's nuclear programme, as per a report by CNN. A state of emergency has been declared in Israel, according to Israeli Defence Minister Israel Katz. "Following the State of Israel's preemptive strike against Iran, a missile and drone attack against the State of Israel and its civilian population is expected in the immediate future," Katz said. Several media reports indicated that Iran attacked Israel using drones.

Crude oil prices surged to $78.50 a barrel, up 13% from Thursday's close of $69.36 a barrel, on fears that the conflict could also jeopardise Iranian oil facilities and tankers. However, crude oil prices eased slightly after reports said the Israeli attack did not affect Iran's oil infrastructure. 

At 1530 IST, the August Brent crude contract on the Intercontinental Exchange was at $74.96 per barrel, up 8% from Thursday.

Some pressure from the rupee lifted later in the day as the intensity of dollar purchases by oil marketing companies eased, dealers said. Moreover, exporters also sold dollars at lucrative dollar/rupee rates, dealers said. Some dealers said that a few foreign banks also seemed to have sold the greenback, likely for foreign fund inflows into some Indian companies, which ended up supporting the rupee and briefly bringing it to the day's high of 85.9400 a dollar.

Meanwhile, the dollar remained broadly weak. The dollar index, which measures the strength of the greenback against a basket of six major currencies, was at 98.33 at 1530 IST, up from 97.84 Thursday but down from 98.58 Wednesday. The dollar index fell Thursday after data showed that the number of Americans filing for unemployment benefits was higher than expected. The figure remained at an eight-month peak last week. For the week ended Jun. 7, initial claims for state unemployment benefits remained unchanged at a seasonally adjusted 248,000. Economists surveyed by Reuters had predicted 240,000 claims for the week. 

FORWARDS

Dollar/rupee forward premiums ended higher Friday as importers bought dollars for forward delivery after the rupee came under pressure in the spot market following the air strikes by Israel on Iran's nuclear facilities, dealers said. The attack led to a surge in crude oil prices, prompting oil companies to buy dollars, dealers said. 

An overnight fall in the benchmark 10-year US Treasury yield also pushed forward premiums up, dealers said. The yield on the 10-year US Treasury note fell to 4.36% Thursday, down 5 basis points from Wednesday. Forwards of a currency pair are reflective of the interest rate differential between the two countries.

Dollar/rupee forward premiums also rose as some banks purchased dollars for forward delivery, taking advantage of the arbitrage opportunity between the onshore forward and offshore non-deliverable forward premiums, dealers said.

Some exporters sold forward dollars at lucrative levels, which capped the rise in premiums, dealers said. At 1530 IST, the premium on the one-year exact-period dollar/rupee forward contract was 162.00 paise, up from 159.50 paise at Thursday's close. On an annualised basis, the premium was at 1.88%, up from the previous close of 1.86%.
 

OUTLOOK

The foreign exchange market will remain shut on Saturday. On Monday, the rupee will take cues from movement in crude oil prices and the dollar index, dealers said. The local unit may also take cues from the movement in the Chinese yuan, they said.

"It is a weekend, so people were a bit cautious. They don't know what might happen on the weekend," a dealer with a state-owned bank said. A further rise in crude oil prices will put pressure on the rupee, dealers said. It may also lead to an increase in dollar purchases by oil marketing companies, putting the rupee under more pressure, dealers said.

Dealers expect the Reserve Bank of India to intervene in the domestic spot market by selling dollars in case the rupee falls sharply. The rupee is expected to trade between 86.00 and 86.50 against the dollar. Dealers peg key technical resistance for the Indian unit at 86.00 a dollar. 

India Rupee - World FX: Dollar recovers after Israel's attacks on Iran

MUMBAI – The dollar recovered from a fall Thursday after Israel attacked Iran's nuclear facilities earlier Friday. Israel launched "pre-emptive strikes" on Iran, in an attempt to sabotage Tehran's nuclear programme, according to a report by CNN.

A state of emergency has been declared in Israel, according to Israeli Defence Minister Israel Katz. "Following the State of Israel's preemptive strike against Iran, a missile and drone attack against the State of Israel and its civilian population is expected in the immediate future," Katz said. Several media reports said Iran indeed attacked Israel using drones.

Fears that rise in conflict between the two countries would hit crude oil supply from the region led to a surge in crude oil prices to $78.50 a barrel, more than 13% higher from Thursday's close of $69.36 a barrel. However, crude oil prices eased slightly after it emerged that the Israeli attack did not hit Iran's oil infrastructure.

At 1716 IST, the August Brent crude contract on the Intercontinental Exchange was at $74.37 per barrel, still over 8% higher from $69.36 a barrel on Thursday. It was $69.77 a barrel Wednesday.

The dollar index had fallen Thursday after data released in the US showed the number of Americans filing for unemployment benefits was higher than expected. The figure remained at an eight-month high last week. For the week ended Jun. 7, initial claims for state unemployment benefits remained unchanged at a seasonally adjusted 248,000. Economists polled by Reuters saw the claims at 240,000.

From over a three-month low Thursday, the dollar index, which measures the strength of the greenback against a basket of six major currencies, recovered to 98.52 at 1713 IST, up from 97.84 Thursday and 98.58 Wednesday.

The Canadian dollar fell 0.2% against the greenback. However, it still fared better than other major currencies, as prices of crude oil had surged. Canada is a major exporter of crude oil to the US. The euro was down 0.7% against the US dollar. The euro came under pressure due to Israel-Iran conflict as it threatened energy supplies to Europe.

The Japanese yen fell 0.6% against the greenback. The Japanese currency also took a hit as the Bank of Japan is not expected to raise the benchmark rates next week due to uncertainty around global trade, a poll by Reuters said. The pound sterling fell 0.5% and the Australian dollar fell 0.8% against the greenback.  (Sourabh Kumar)

India Rupee: Premiums rise as importers buy fwd dollars after rupee slumps

MUMBAI – Dollar/rupee forward premiums rose across the curve Friday as importers bought dollars for forward delivery, dealers said. This was after the rupee came under pressure in the spot market following air strikes by Israel on Iran's nuclear facilities, dealers said. The attack led to a surge in crude oil prices, prompting oil companies to buy dollars, dealers said.

"Premiums are higher now, initially as the spot (rupee) came under pressure, and then importers also hedged," a dealer with a foreign bank said. Since crude oil is a major commodity India imports, rise in its price raises the country's import bill, thus weighing on the domestic currency, dealers said.

Early in the day, the August contract of Brent crude oil rose to $78.50 a barrel, up over 13% from Thursday's close of $69.36 a barrel. Prices eased a bit later on reports that there was no impact of Israel's attacks on Iranian oil facilities or tankers. At 1314 IST, the August Brent crude contract on the Intercontinental Exchange was at $72.95 per barrel, still over 5% higher than Thursday. US West Texas Intermediate surged over 14% earlier Friday.

Israel launched "preemptive strikes" on Iran early Friday in an attempt to sabotage Tehran's nuclear programme, CNN reported. A state of emergency has been declared in Israel, according to Israeli Defence Minister Israel Katz. "Following the State of Israel's pre-emptive strike against Iran, a missile and drone attack against the State of Israel and its civilian population is expected in the immediate future," Katz said.

The one-year exact-period dollar/rupee forward premium rose to a 10-day high of 1.93% Friday. In the spot market, the rupee fell to an over two-month low of 86.20 a dollar, but a likely intervention by the Reserve Bank of India by selling dollars prevented the Indian currency from falling further, dealers said.

An overnight fall in the benchmark 10-year US Treasury yield also pushed forward premiums up, dealers said. The yield on the 10-year US Treasury note fell to 4.36% Thursday, down 5 basis points from Wednesday. Forwards of a currency pair are reflective of the interest rate differential between the two countries.

Dollar/rupee forward premiums also rose as some banks purchased dollars for forward delivery, taking advantage of the arbitrage opportunity between the onshore forward and offshore non-deliverable forward premiums, dealers said.

Some exporters sold forward dollars at lucrative levels, which capped the rise in premiums, dealers said. However, a lot of exporters waited for premiums to move even higher before selling forward dollars in large quantum, dealers said. At 1342 IST, the premium on the one-year, exact-period dollar/rupee forward contract was 163.66 paise, up from 159.50 paise at Thursday's close. On an annualised basis, the premium was at 1.90%, up from previous close of 1.86%.  (Sourabh Kumar)

India Rupee: Erases some losses on likely RBI dlr sales near 86.20/$

MUMBAI – The rupee erased some of its losses against the dollar as the Reserve Bank of India stepped in with dollar sales to prevent a sharp depreciation in the Indian unit, dealers said. "They stepped in early at around 86.20 (a dollar), and that's where the exporters stepped in," a dealer at a state-owned bank said.

The RBI sold dollars to prevent runaway depreciation in the Indian unit after the Indian unit came under pressure from rising crude oil prices and heightened geo-political tensions in West Asia, dealers said. Crude oil futures soared over 10% after Israel carried out strikes on nuclear sites in Iran early Friday. 

Israel launched "preemptive strikes" on Iran early Friday in an attempt to sabotage Tehran's nuclear programme, CNN reported. A state of emergency has been decalred in Israel, according to Israeli Defence Minister Israel Katz. "Following the State of Israel's pre-emptive strike against Iran, a missile and drone attack against the State of Israel and its civilian population is expected in the immediate future," Katz said. 

Iranian state media has confirmed the death of Revolutionary Guards commander Hossein Salami. Another top Guards official and two nuclear scientists are also feared dead, according to media reports.

Crude futures eased a bit after reports said none of the oil tankers or refineries were affected in Iran. At 1139 IST, the August Brent crude contract on the Intercontinental Exchange was at $74.37 per barrel, over 7% higher than its close on Thursday, while the US West Texas Intermediate was over 8% higher at $73.50 per barrel.

Dealers said exporters sold dollars due to attractive levels, which also supported the Indian unit. A weak dollar index also supported the local unit, dealers said. At 1141 IST, the dollar index, which measures the strength in the dollar against a basket of six major currencies, was at 98.24, against its previous close of 97.84 and 98.58 Wednesday. The index touched an over three-year low of 97.60 on Thursday.

During the day, the rupee is seen moving in a range of 85.80 and 86.30 against the dollar. Dealers peg key technical suport for the Indian unit at 86.20 per dollar. (Kabir Sharma)

India Rupee: Technical levels for rupee - Jun 13

MUMBAI – At 1119 IST, the rupee was at 86.1275 per dollar. At 0900 IST, the rupee was at 86.1375 a dollar, against the previous close of 85.6000. Following are the key support and resistance levels for the rupee as provided by leading banks and brokerages:

(Gowri Lakshmi)

India Rupee:Breaches 86/$ as crude surges over 10% after Israel strikes Iran

MUMBAI – The rupee breached the crucial 86-per-dollar level on Friday as crude oil prices surged over 10% after reports that Israel had carried out strikes on nuclear sites in Iran, dealers said. The rupee touched a low of 86.20 against the dollar, before erasing some losses.   

Crude oil prices surged over 10% in early trade on Friday, hitting their highest level in over two months, after Israel announced it had targeted Iran, heightening worries about disruption in oil supply. A sure in crude oil prices increases India's import bill, which in turn weighs on the currency. At 0938 IST, the August Brent crude contract on the Intercontinental Exchange was at $75.44 per barrel, over 9% higher than its close on Thursday, while the US West Texas Intermediate was over 8% higher at $73.75 per barrel.

"It's all about oil today, its an understatement to say importers are panicking. If Iran retaliates, the situation can get far worse," a dealer at a state-owned bank said. "Difficult to predict where it will go from here, but exporters are selling as these are good levels for them." 

Israel launched "preemptive strikes" on Iran early Friday in an attempt to sabotage Tehran's nuclear programme, CNN reported. A state of emergency has been decalred in Israel, according to Israeli Defence Minister Israel Katz. "Following the State of Israel's preemptive strike against Iran, a missile and drone attack against the State of Israel and its civilian population is expected in the immediate future," Katz said. 

Iranian state media has confirmed the death of Revolutionary Guards commander Hossein Salami. Another top Guards official and two nuclear scientists are also feared dead, according to media reports.

Dealers said exporters sold dollars due to attractive levels, which supported the Indian unit. They said the Reserve Bank of India was yet to intervene in the currency market despite the sharp depreciation in the Indian unit. 

The rupee failed to gain any advantage from the dollar falling to an over three-year low on Thursday due to the tensions in West Asia, dealers said. The dollar declined on Thursday, as disappointing data on US inflation and labour market led to expectations of the Federal Reserve lowering interest rates sooner rather than later, while the safe-haven yen and Swiss franc gained from escalating tensions in West Asia.

However, the dollar gained some support from safe haven demand early Friday after reports of Israel striking Iran. At 0934 IST, the dollar index, which measures the strength in the dollar against a basket of six major currencies, was at 98.16, against its previous close of 97.84 and 98.58 Wednesday. The index touched an over three-year low of 97.60 on Thursday.

During the day, the rupee is seen moving in a range of 85.80 and 86.30 against the dollar. Dealers peg key technical suport for the Indian unit at 86.20 per dollar. (Kabir Sharma)

India Rupee - Asia FX: Down as risk sentiment hit after Israel strikes Iran

MUMBAI – Most Asian currencies were down against the dollar as risk sentiment towards emerging markets took a severe hit after reports that Israel had carried out strikes on nuclear sites in Iran. 

Israel launched "preemptive strikes" on Iran early Friday in an attempt to sabotage Tehran's nuclear programme, CNN reported. A state of emergency has been decalred in Israel, according to Israeli Defence Minister Israel Katz. "Following the State of Israel's preemptive strike against Iran, a missile and drone attack against the State of Israel and its civilian population is expected in the immediate future," Katz said. 

Iranian state media has confirmed the death of Revolutionary Guards commander Hossein Salami. Another top Guards official and two nuclear scientists are also feared dead, according to media reports.

At 0920 IST, the dollar index, which measures the strength in the dollar against a basket of six major currencies, was at 98.25, against its previous close of 97.84 and 98.58 Wednesday. The index touched an over three-year low of 97.60 on Thursday.

The South Korean won was the worst hit among currencies in the region, and was down 1% against the dollar. The won fell from a near eight-month high on Thursday as demand for safe-haven currencies rose after tensions in West Asia. 

The Philippines peso was down 0.6% against the dollar. Coins.ph announced that its PHPC stablecoin had graduated from the Philippines regulatory sandbox operated by the central bank, Bangko Sentral ng Pilipinas. This will be the country's first regulated crypto currency. 

The Indonesian rupiah was down 0.4% against the dollar, while the Malaysian riggit was down 0.6%. The Thai baht was 0.3% lower against the US unit. (Kabir Sharma)

India Rupee: Expected range for rupee - Jun 13

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:

(Sourabh Kumar, Gowri Lakshmi, Kabir Sharma 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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