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Informist, Monday, Jun. 16, 2025

MUMBAI – The rupee ended steady against the dollar Monday as likely dollar sales by the Reserve Bank of India offset the demand for the greenback from importers, dealers said. Foreign banks' dollar sales on behalf of foreign portfolio investors helped rupee reverse the losses from early trade, they said. "RBI's action replay from Friday was evident today as well," a currency trader at a brokerage firm said. "They supported rupee at around 86.15-86.10 (a dollar) levels actively." 

After hitting an over two-month low of 86.2325, the rupee settled at 86.0650, little changed from its previous close of 86.0800. The rupee moved 29 paise during the day. 

Most Asian currencies also closed higher against the greenback following a decline in the dollar index. Asian currencies moved between 0.1-0.5%, with the Taiwan dollar gaining the most amongst its regional peers.

The rupee opened lower against the dollar at 86.1800 as importers rushed to purchase the greenback, fearing a further rise in crude oil prices, dealers said. Crude prices began skyrocketing after Israel's "pre-emptive" attacks on Iranian nuclear facilities Friday, leading to panic across global markets. On Friday, crude oil prices hit an over five-month high of $78.50 per barrel.

Israel and Iran launched fresh attacks against each other on Sunday, which killed and wounded civilians and raised concerns about a broader conflict in the region. Israeli Prime Minister Benjamin Netanyahu said, "Iran will pay a heavy price for the murder of civilians, women and children." Iran, meanwhile, reiterated to Oman and Qatar who are mediating the nuclear negotiations with the US that Tehran will not agree to the negotiations while it is still under Israeli attacks. 

In early trade, the August Brent Crude contract on the Intercontinental Exchange rose to $78.32 before coming down to $73.38 per barrel at 1530 IST, slightly down from $74.23 per barrel Friday and $69.36 per barrel Thursday.

However, the rupee was able to reverse all the losses as foreign banks sold the greenback, likely on behalf of foreign portfolio investors, dealers said. They said the quantum of inflows may have been lower-than-usual and dull volume in the currency market led to sharp movements in the dollar/rupee levels. Both the benchmark indices, the Nifty 50 and the BSE Sensex, ended higher by 0.9% and 0.8%, respectively. 

Further, some dealers also said a few exporters sold the greenback, while most remained on the sidelines, to take advantage of the relatively higher dollar/rupee levels. This further provided a cushion to the rupee, according to some dealers. Dealers also said some public-sector banks sold the greenback, on behalf of the RBI at 86.10-86.15 a dollar, which prevented the rupee from falling sharply, dealers said.

"RBI is active again. With the current situation, geopolitical tensions are fluid and crude is going to rise further in near term, so supporting rupee is a must," the currency trader said. 

The rupee was also lifted by a fall in the dollar index after the European markets opened, dealers said. The dollar index fell as the euro rose 0.3% owing to safe-haven flows. At 1530 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 97.94, down from its previous close of 98.14 and broadly steady from 97.84 Thursday. According to the CME FedWatch tool, traders see a 99.8% probability of the Fed maintaining status quo on rates Wednesday.

Meanwhile, India's merchandise trade deficit narrowed to $21.88 billion in May from $22.09 billion a year ago. Merchandise exports fell 2.2% on year in May to $38.73 billion, while imports were down 1.7% on year at a three-month low of $60.61 billion. In April, India had exported goods worth $38.49 billion and imported goods worth $64.91 billion. 

FORWARDS

The dollar/rupee forward premiums fell across tenors Monday, tracking a rise in US Treasury yields, dealers said. Forwards of a currency pair are reflective of the interest rate differential between the two countries. 

Meanwhile, some banks purchased dollars for forward delivery on behalf of importers, who feared a further fall in the rupee going ahead amid the rising global geopoliticial tensions, which limited losses in premiums, dealers said. The Indian unit hit an over two-month low of 86.2325 a dollar earlier in the day. 

At 1530 IST, the premium on the one-year, exact-period dollar/rupee forward contract was 159.90 paise, against 162.00 paise at Friday's close. On an annualised basis, the premium was at 1.84%, against the previous close of 1.83%. 

OUTLOOK

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

The rupee may come under pressure as importers could purchase the greenback, wary of a further rise in crude prices, dealers said. Dealers expect the Reserve Bank of India to continue intervening in the domestic spot market by selling dollars in case the rupee inches close to the 86.30 per dollar mark. Dealers also expect likely foreign fund inflows into the domestic stock market to provide further cushion to the rupee.

The rupee is expected to trade between 85.90 and 86.30 against the dollar Friday. Dealers peg key technical support for the Indian unit at 85.20 a dollar.

India Rupee - World FX: Dlr weakens; mkts eye multiple central bk decisions

MUMBAI – The dollar index fell after the European markets opened as investors moved to other safe-haven assets amid ongoing geopolitical tensions in West Asia. Israel launched preemptive attacks against Iran Friday, targetting its nuclear facilities, which triggered a wave of panic across global financial markets. On Sunday, Iran and Israel launched fresh attacks on each other, wounding and killing several civilians.

"Iran will pay a heavy price for the murder of civilians, women and children," Israeli Prime Minister Benjamin Netanyahu said. Iran, on the other hand, reiterated to mediators Qatar and Oman that Tehran would not agree to nuclear negotiations with the ceasefire while it is under Israeli attack. 

Market participants now await the outcome of the Federal Open Market Committee meeting, due on Wednesday. According to the CME FedWatch tool, traders see a 99.8% probability of the Fed maintaining status quo on rates Wednesday. At 1530 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 97.98, broadly steady from its previous close of 98.14 and 97.84 Thursday. The index rose to a high of 98.37 earlier in the day. 

The euro rose 0.3% against the greenback owing to safe-haven flows. European Central Bank Vice President Luis de Guindos said that the threat of inflation falling short of the central bank's target of 2% has been contained with the inflation print in the bloc hovering around the target. "The risk of undershooting is very limited in my view," Guindos said. "Our assessment is that risks for inflation are balanced."

The Japanese yen fell 0.1% against the US currency ahead of the monetary policy decision by the Bank of Japan, due Tuesday. The Bank of Japan is widely expected to hold its benchmark rate steady at 0.5%. The Swiss franc traded flat against the greenback. The Swiss National Bank is scheduled to announce its monetary policy decision on Thursday, where it is expected to lower its interest rate by 25 basis points to 0.0%.

The Canadian dollar was up 0.1% against the greenback as the commodity-linked currency was supported by rising crude oil prices. At 1530 IST, the August West Texas Intermediate crude traded at $72.52 per barrel, broadly steady from its previous close of $72.98 per barrel but sharply up from $68.04 per barrel Thursday. 

The pound sterling was up 0.1% against the greenback. The Bank of England is scheduled to deliver its policy decision Thursday, where it is expected to maintain status quo at 4.25%, going with the "gradual approach" to cut rates after a reduction in May. 

The Australian dollar and the New Zealand dollar were up 0.4% and 0.5%, respectively, after China posted upbeat retail sales growth in May. Data published earlier in the day showed China's retail sales in May grew at its fastest pace since late 2023 and rose 6.4% from a year earlier. The data came much stronger than the analyst forecast of 5% growth in a Reuters poll and higher than the 5.1% growth the month prior. Any change in the Chinese economy directly impacts the New Zealand and Australian currencies due to their close bilateral trade relations.  (Gowri Lakshmi)

India Rupee: Premiums down as US ylds rise amid ongoing Israel-Iran tensions

MUMBAI – The dollar/rupee forward premiums fell across tenors Monday, tracking a rise in US Treasury yields, dealers said. "The premium levels are largely tracking the UST (US Treasury). There was paying and receiving today (Monday), but overall it's more on the leftward side," a currency trader at a brokerage firm said. Forwards of a currency pair are reflective of the interest rate differential between the two countries. 

The US Treasury yields jumped Friday and rose further early Monday amid escalating geopolitical tensions in West Asia. On Friday, Israel launched preemptive attacks against Iran, targetting its nuclear facilities, which sent shock waves across global financial markets. On Sunday, Iran and Israel launched fresh attacks on each other, wounding and killing several civilians.

"Iran will pay a heavy price for the murder of civilians, women and children," Israeli Prime Minister Benjamin Netanyahu said. Iran, on the other hand, reiterated to mediators Qatar and Oman that Tehran would not agree to nuclear negotiations with the ceasefire while it is under Israeli attack. 

Market participants now await the outcome of the Federal Open Market Committe meeting, due on Wednesday. According to the CME FedWatch tool, traders see a 96% probability of the Fed maintaining status quo on rates Wednesday. "With market expecting no more rate cuts from the US Fed and the RBI (Reserve Bank of India) at least until September, I think the forward levels should stabilise here," said another dealer at a brokerage firm. 

Meanwhile, some banks purchased dollars for forward delivery on behalf of importers, who feared a further fall in the rupee going ahead amid the rising global geopoliticial tensions, which limited losses in premiums, dealers said. The Indian unit hit an over two-month low of 86.2325 a dollar earlier in the day. 

At 1445 IST, the premium on the one-year, exact-period dollar/rupee forward contract was 158.50 paise, against 162.00 paise at Friday's close. On an annualised basis, the premium was at 1.84%, against the previous close of 1.88%. (Gowri Lakshmi)

India Rupee: Reverses losses on likely FPI inflows, decline in dollar index

India Rupee: Reverses losses on likely FPI inflows, decline in dollar index

MUMBAI – The rupee erased all its losses against the greenback and rose slightly on likely dollar sales by foreign banks and private sector banks on behalf of foreign portfolio investors, dealers said. A fall in the dollar index also supported the rupee, they said. The rupee fell to an over-two-month low of 86.2325 a dollar earlier in the day. 

The rupee was able to erase all the losses as foreign banks and some private sector lenders sold the greenback on behalf of overseas investors, who wanted to invest in domestic stock market, dealers said. At 1326 IST, the benchmark stock indices, the Nifty 50 and the BSE Sensex were up 0.9% and 0.8%, respectively. However, dealers said the quantum of inflows may have been lower-than-usual and dull volume in the currency market led to sharp movements in the dollar/rupee levels. 

"Equities are sharply up, I think some FPI flows are there. But even then, the inflows aren't as much move to the rupee from today's opening levels," a currency trader at a brokerage firm said.

The rupee was also supported by a fall in the dollar index after the European markets opened, dealers said. The dollar index fell as the euro rose 0.3% owing to safe haven flows. At 1333 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 97.95, down from its previous close of 98.14 and broadly steady from 97.84 Thursday. 

Some dealers also speculated that the Reserve Bank of India may have intervened in the currency market with dollar sales, likely to prevent a sharp fall in the rupee. For the rest of the day, the rupee is seen moving in a range of 85.90 and 86.20 against the dollar. Dealers peg key technical resistance for the rupee at 85.90 against the greenback.  (Gowri Lakshmi)

India Rupee: Technical levels for rupee - Jun 16

MUMBAI – At 1107 IST, the rupee was at 86.0650 per dollar. At 0900 IST, the rupee was at 86.1800 a dollar, against the previous close of 86.0800. Following are the key support and resistance levels for the rupee as provided by leading banks and brokerages:

(Gowri Lakshmi)

India Rupee - Asia FX: Most dn as dollar gains amid tensions in West Asia

MUMBAI – Most Asian currencies traded lower against the dollar Monday as the dollar index rose owing to safe haven inflows amid rising geopolitical tensions in West Asia. Tensions in West Asia escalated after Israel launched pre-emptive attacks on Iranian nuclear facilities. On Sunday, both the countries launched fresh attacks, killing and injuring civilians. 

Tehran reiterated to mediators Qatar and Oman that it will not agree to the ongoing nuclear negotiations with the US while it is under Israel's attack. Israeli Prime Minister Benjamin Netanyahu said Iran will have to pay a heavy price for murdering civilians, women and children. At 0957 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 98.31, slightly up from 98.14 Friday and up from 97.84 Thursday. 

The Malaysian ringgit and the Taiwan dollar traded flat against the US currency. The South Korean won was down 0.1% against the greenback. South Korea's newly elected President Lee Jae-Mying will attend the Group of Seven summit in Canada. According to officials, Lee is expected to hold bilateral talks with leaders from various countries and is open to engage in trilateral talks with the US and Japan. 

The Philippines was the worst hit among its regional peers, falling 0.7% against the greenback. At 1001, the benchmark stock index, the Philippine Stock Exchange Index, was down 0.6%. The Indonesian rupiah was down 0.1% against the US currency and the Thai baht was down 0.3%. 

The offshore Chinese yuan traded flat against the greenback. Data published earlier in the day showed China's retail sales in May grew at its fastest pace since late 2023 and rose 6.4% from a year earlier. The data came much stronger than the analyst forecast of 5% growth in a Reuters poll and higher than the 5.1% growth the month prior. However, growth in industrial output slowed to 5.8% from 6.1% on year in May. Further, China's unemployment rate hit the lowest level in six months to 5% in May, falling marginally from 5.1% in April.  (Gowri Lakshmi) 

India Rupee: Down on importers' dollar purchases, likely FPI outflows

MUMBAI – The rupee traded lower against the dollar Monday owing to demand for dollar demand from importers and foreign portfolio investors, dealers said. "There isn't as much panic as we saw last week," said a dealer at a state-owned bank. "But dollar demand is there, especially from oil marketing companies." 

The rupee came under pressure as oil marketing companies began purchasing the greenback, fearing further rise in crude oil prices, dealers said. Oil prices soared since Friday due to rising geopolitical tensions in West Asia after Israel and Iran started military strikes against each other. Early Friday, Israel launched preemptive attacks against Iran and targetted its nuclear facilities. 

On Sunday, Iran and Israel launched fresh attacks, wounding and killing several civilians. "Iran will pay a heavy price for the murder of civilians, women and children," Israeli Prime Minister Benjamin Netanyahu said. Meanwhile, Iran reiterated to mediators Qatar and Oman that Tehran would not agree to nuclear negotiations with the ceasefire while it is under Israeli attack. 

At 0930 IST, the August Brent Crude contract on the Intercontinental Exchange was at $74.87 per barrel, slightly up from its previous close of $74.23 per barrel and sharply higher than $69.36 per barrel Thursday. Crude prices hovered near five-month highs and touched $78.32 per barrel level in early trade. 

A few dealers said the rupee was weighed down by dollar demand from overseas investors, who wanted to withdraw funds from domestic financial markets. So far in June, foreign portfolio investors have withdrawn $1.6 billion from Indian markets.

Dealers expect the Reserve Bank of India to step in with dollar sales if the rupee inches toward the crucial level of 86.35 per dollar, where several stop-losses on long dollar bets are placed. "There seems to be strong resistance at 26-27 (86.26-86.27 a dollar) itself. It's unlikely it would inch toward the key level but if it does, stop-losses (on long dollar bets) will be triggered and rupee will see a sharp fall and even exporters will come in," the dealer at the state-owned bank said.

During the day, the rupee is seen moving in a range of 86.00 and 86.30 against the greenback. Dealers peg immediate support for the Indian unit at 86.30 a dollar.  (Gowri Lakshmi)

India Rupee: Expected range for rupee - Jun 16

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 and Pratiksha)

End

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

Edited by Tanima Banerjee

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