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Informist, Tuesday, Jun. 17, 2025

 

By Gowri Lakshmi

 

MUMBAI – After teetering for most part of the day, the rupee ended close to a 10-week low against the dollar Tuesday as the conflict in west Asia sparked excessive dollar demands from foreign portfolio investors, dealers said. Likely dollar sales by the Reserve Bank of India and exporters limited the rupee's fall, they added.

 

"There is no hope for the rupee to appreciate in the wake of a war in west Asia," a dealer at a private-sector bank said. "Iran is a huge player among oil-producing countries. The uncertainty adds to the worry and keeps investors on tenterhooks."

 

The rupee fell 0.2% and settled at 86.2400 against the dollar, sharply down from its previous close of 86.0650. The Indian currency moved in a range of over 40 paise during the day and hit a low of 86.2850, its lowest level since Apr. 9.

 

Most other Asian currencies also fell against the greenback as investors continued to assess the conflict in west Asia. Other Asian currencies fell 0.1-0.5%, with the South Korean won being the worst hit.

 

The rupee opened slightly higher from its previous close at 86.0125 against the dollar, likely supported by foreign fund inflows, dealers said. The rupee was trading at 86.14 a dollar in the non-deliverable forwards market and, owing to likely dollar sales by foreign banks, started the day on a positive note.

 

The rupee was supported by foreign fund inflows likely relating to the qualified institutional placement of pharmaceutical company Biocon Ltd., which announced the QIP Monday. The company will raise INR 4.50 billion through the QIP and had set the floor price at INR 340.20 per share. Kotak Mahindra Capital, Goldman Sachs, and Bank of America Securities are advising Biocon on the capital raise, Moneycontrol reported, citing sources. The rupee rose to a high of 85.8825 in early trade.

 

Noting the rise of the rupee and relatively lower crude oil prices in early trade, oil marketing companies and other importers purchased dollars fearing a further rise in crude oil prices and a fall in the rupee, dealers said. This limited a further rise in the Indian unit, they said. Investor sentiments were hit after the conflict between Israel and Iran escalated Tuesday, triggering supply-side concerns.

 

Iran's state broadcaster was hit by an Israeli strike Monday and the head of the United Nations nuclear watchdog hinted at "extensive damage" to Iran's biggest uranium enrichment plant. Iran has urged Qatar, Oman, and Saudi Arabia to press US President Donald Trump to use his influence on Israel to reach an immediate ceasefire with Iran in return for flexibility by Tehran in the nuclear talks with Washington, Reuters reported.

 

In the latest development, Iran launched fresh missile attacks on Israel Tuesday, with explosions heard in Tel Aviv and Jerusalem, media reports said. Trump left early from the Group of Seven summit in Canada as the conflict escalated, but not before warning Iranians to evacuate their capital Tehran.

 

At 1530 IST, the August Brent Crude contract on the Intercontinental Exchange was at $74.68 per barrel, slightly higher than $73.23 per barrel Monday and $74.23 a barrel Friday. In early trade, crude oil prices had risen to a high of $74.85 per barrel.

 

However, the continuing geopolitical uncertainties and the likelihood of further escalation of the conflict in west Asia made investors withdraw their funds from Indian financial markets and move to safe-haven assets, dealers said. This persistent demand for dollars from FPIs and importers triggered stop-losses at the level of 86.15 a dollar and pushed the rupee to a low of 86.2825.

 

"Oilers and FPIs keep buying dollars," said a currency trader at a brokerage firm. "It has been a trend since the last week and is one of the reasons why the rupee is not able to rise past certain levels despite the inflows." Dealers said overseas investors withdrew funds from both the government securities market and the domestic stock market. The benchmark stock indices, the Nifty 50 and the BSE Sensex, were down 0.4% and 0.3%, respectively. So far in June, FPIs have withdrawn $1.6 billion from the domestic markets. 

 

However, a sharper fall in the rupee was contained as the RBI stepped in with dollar sales, according to some dealers. They said the intervention by the central bank remained "mild" in nature. A few exporters also sold the greenback below 86.20 a dollar to take advantage of the relatively higher dollar/rupee levels, dealers said. This provided further cushion to the Indian currency and lifted it to end at 86.24 a dollar. 

 

The dollar index remained steady throughout the day ahead of US retail sales data for May due later in the day. At 1530 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 98.15, little changed from the previous close of 98.14 Monday and Friday.

 

	AT 1530 IST	AT 0900 IST	HIGH	LOW	PREVIOUS (AT 1530 IST)
Spot rupee per $1	86.2400	86.0125	85.8825	86.2825	86.0650
1-year dlr/rupee fwd (paise)	155.64	151.97	155.64	151.97	157.50

 

FORWARDS

The one-year exact-period dollar/rupee forward premium ended near a 11-month low, tracking a rise in the 10-year benchmark US Treasury yield, dealers said. However, some importers purchased forward dollars, taking advantage of the relatively lower premium, which prevented the premium from falling further, they said.

 

Some banks sold dollars for forward delivery on behalf of exporters in anticipation of a further fall in premiums, dealers said. However, a narrowing liquidity surplus in the banking system limited the fall of forward premiums, a few dealers said. The RBI Monday had absorbed INR 2.68 trillion from the banking system, down from INR 2.80 trillion Sunday. It had absorbed INR 3.62 trillion Friday.

 

Market participants are now waiting for the US Federal Reserve's policy decision, due late Wednesday. The US central bank is widely expected to keep the fed funds rate steady at 4.25-4.50%.

 

At 1530 IST, the premium on the one-year, exact-period dollar/rupee forward contract was 155.63 paise, down from 157.50 paise at Monday's close. On an annualised basis, the premium was 1.80%, against the previous close of 1.83%. 

 

OUTLOOK

Wednesday, 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. Investors will look out for any further developments in the Israel-Iran conflict, which may trigger further uncertainty and unrest in the region. 

 

The rupee may come under pressure as importers could purchase the greenback, wary of a further rise in crude oil prices, dealers said. They also expect likely foreign fund outflows to weigh on the Indian unit. However, the RBI may continue to intervene in the domestic spot market by selling dollars in case the rupee inches close to the 86.30 per dollar mark. Should the rupee fall past 86.30 a dollar, a few exporters may also sell the greenback, which would limit the rupee's fall. 

 

The rupee is expected to trade between 85.90 and 86.40 against the dollar Wednesday. Dealers peg key technical support for the Indian unit at 85.30 a dollar.

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India Rupee - World FX: Yen down on BoJ Governor Ueda's comments

 

	AT 1530 IST	HIGH	LOW	PREVIOUS
GBP/USD	1.3550	1.3582	1.3547	1.3576
EUR/USD	1.1559	1.1573	1.1543	1.1561
NZD/USD	0.6068	0.6075	0.6046	0.6051
AUD/USD	0.6531	0.6544	0.6503	0.6523
USD/JPY	144.9040	145.1090	144.4070	144.7330
USD/CAD	1.3565	1.3583	1.3564	1.3565
EUR/JPY	167.4980	167.6210	166.9810	167.3600
CHF/USD	1.2304	1.2316	1.2275	1.2289
EUR/CHF	0.9393	0.9415	0.9381	0.9405

 

MUMBAI – The Japanese yen was down 0.1% against the dollar Tuesday after Bank of Japan held rates steady at 0.5%, as widely expected, and decided to reduce the pace of its balance sheet drawdown next year. The decision to decelerate the pace of balance sheet drawdown hinted at a preference to move cautiously in reducing the decade-long stimulus.

 

"For the time being, there is extremely high uncertainty over each country's trade policy," Ueda said. "As such, there is bigger downside risk for both Japan's economy and prices."

 

The pound sterling was down 0.2% against the greenback ahead of UK's consumer price index data Wednesday. The euro was flat against the US currency. The ZEW economic sentiment index of Germany, the largest economy in the euro bloc, jumped to 47.5 in June from 25.2 in May, beating the market consensus of 35.

 

The Australian dollar and New Zealand dollar were up 0.1% against the US currency due to a weak dollar index amid ongoing geopolitical uncertainties. The dollar index remained weak ahead of the US retail sales data later in the day. Market participants are also waiting for the policy decision of the US Federal Reserve late Wednesday, where the central bank is widely expected to hold rates steady at 4.25-4.50%. 

 

At 1530 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 98.15, little changed from the previous close of 98.14 Monday and Friday.

 

In the latest developments in West Asia, Iran launched fresh missile attacks on Israel, with explosions heard in Tel Aviv and Jerusalem, media reports said. Meanwhile, US President Donald Trump left early from the Group of Seven summit as conflict in West Asia escalated but not before warning Iranians to evacuate Tehran. 

 

The Swiss franc was up 0.1% against the greenback due to likely safe-haven inflows. The Canadian dollar was flat against the US dollar.  (Gowri Lakshmi)

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India Rupee: One-year premium falls to near 11-month low as US yields rise

 

	AT 1445 IST	AT 0900 IST	HIGH	LOW	PREVIOUS (AT 1530 IST)
Spot rupee per $1	86.2075	86.0125	85.8825	86.2200	86.0650
1-year dlr/rupee fwd (paise)	155.63	151.97	155.64	151.97	157.50

 

MUMBAI – The one-year exact-period dollar/rupee forward premium fell to a near 11-month low, tracking a rise in the benchmark 10-year US Treasury yield, dealers said. However, some importers purchased forward dollars, taking advantage of relatively lower premium, which prevented the premium from falling further, dealers said.

 

"Most importers are not paying at these levels, they are eyeing 1.75% and below," a currency trader at a brokerage firm said. The one-year exact-period dollar/rupee premium had fallen to a low of 1.77% earlier in the day.

 

The yield on the 10-year US Treasury note rose 5 basis points Monday due to rising geopolitical tensions in West Asia, which pushed dollar/rupee forward premiums lower. On Tuesday, Iran launched fresh missile attacks on Israel, with explosions heard in Tel Aviv and Jerusalem, media reports said. Meanwhile, US President Donald Trump left early from the Group of Seven summit as conflict in West Asia escalated but not before warning Iranians to evacuate Tehran.

 

Some banks sold dollars for forward delivery on behalf of exporters on anticipation that premiums could fall more, dealers said. However, a narrowing liquidity surplus in the banking system limited the fall of forward premiums, a few dealers said. The Reserve Bank of India Monday absorbed INR 2.68 trillion from the banking system, down from INR 2.80 trillion Sunday. It had absorbed INR 3.62 trillion on Friday.

 

Market participants are waiting for US Federal Reserve's policy decision late Wednesday, with the central bank widely expected to keep the Fed Funds rate steady at 4.25-4.50%.

 

At 1444 IST, the premium on the one-year, exact-period dollar/rupee forward contract was 155.63 paise, down from 157.50 paise at Monday's close. On an annualised basis, the premium was at 1.80%, against the previous close of 1.83%.  (Gowri Lakshmi)

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India Rupee: Falls on importers' dollar demand; likely FX inflows limit loss

 

	AT 1256 IST	AT 0900 IST	HIGH	LOW	PREVIOUS (AT 1530 IST)
Spot rupee per $1	86.1525	86.0125	85.8825	86.1625	86.0650

 

MUMBAI – The rupee erased all gains from early trade and fell against the dollar as oil marketing companies and other importers rushed to purchase the greenback, fearing further rise in crude oil prices, dealers said. However, likely foreign fund inflows into Indian financial markets limited the fall of the rupee, dealers said. 

 

"There was no much demand from importers in the morning, the situation looked calm," a dealer at a state-owned bank said. "But given how things are changing, importers just want to book at profitable levels. Crude prices are likely to shoot up." 

 

Oil marketing companies purchased the greenback, wary of a sharp and sudden rise in crude prices due to supply concerns arising from the ongoing conflict between Israel and Iran. Iran is one of the largest oil producing members of the Organization of the Petroleum Exporting Countries and its allies and any distress in Iran would impact supply. 

 

In the latest of developments, explosions were heard in Tel Aviv and Jerusalem as the Israeli military alleged Iran had launched a new wave of missile attacks. Meanwhile, US President Donald Trump left the Group of Seven summit early owing to escalation of geopolitical worries in West Asia, after warning Iranians to evacuate Tehran. 

 

At 1248 IST, the August Brent Crude contract on the Intercontinental Exchange was at $73.33 per barrel, broadly steady from its previous close of $73.23 per barrel and down from $74.23 per barrel Friday. 

 

However, the rupee's fall was limited due to foreign fund inflows, likely relating to the qualified institutional placement of phramaceutical company Biocon. The company informed exchanges on Monday that it would raise INR 4.5 billion through the QIP, and set the floor price at INR 340.2 per share.

 

For the rest of the day, the rupee is seen moving a range of 86.00-86.25 against the dollar. Dealer peg key immediate support for the Indian unit at 86.20 against the greenback.  (Gowri Lakshmi)

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India Rupee: Technical levels for rupee - Jun 17

 

MUMBAI – At 1121 IST, the rupee was at 86.0825 per dollar. At 0900 IST, the rupee was at 86.0125 a dollar, against the previous close of 86.0650. Following are the key support and resistance levels for the rupee as provided by leading banks and brokerages:

 

Participants	S2	S1	R1	R2
State-owned bank	86.40	86.20	85.70	85.50
State-owned bank	86.25	86.10	85.87	85.75
Brokerage firm	86.55	86.25	85.55	85.30

 

(Gowri Lakshmi)

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India Rupee - Asia FX: Most down; Bank Indonesia policy decision eyed Wed

 

MUMBAI – Most Asian currencies were trading lower against the dollar Tuesday as investors continue to assess the geopolitical situation in West Asia. Tensions between Israel and Iran escalated after an Israeli strike hit Iran's state media. United Nations nuclear watchdog Monday indicated that Iranian's biggest nuclear enrichment plant suffered "extensive damage".

 

According to reports, Iran has urged Qatar, Oman and Saudi Arabia to reach a ceasefire agreement immediately and urged the US to push for the ceasesire with Israel using its influence. Iran wants the US to urge Israel in exchange for flexibility in its nuclear negotiations with Washington, Reuters reported. 

 

The Indonesian rupiah was down 0.1% against the greenback. Market participants await the monetary policy decision of Bank Indonesia on Wednesday, where it is widely expected to hold rates steady at 5.50% as the central bank aims to prioritise stability of the rupiah. 

 

The Malaysian ringgit and the Chinese yuan traded flat against the dollar. The Taiwan dollar was down 0.1% against the US unit. Taiwan's central bank is likely to maintain status quo at its policy meeting Thursday. The Thai baht was down 0.2% against the dollar. 

 

The Philippine peso was down 0.3%, while the South Korean won traded flat. South Korea's government is set to introduce a supplementary budget for the second time this year on Thursday after the $10.13-billion budget was passed in May to revive growth in its sluggish economy. The budget plan, which aims to boost consumer spending and help the recovery of people's lievlihoods, will be taken up at a cabinet meeting, a spokesperson at the presidential office said Monday.

 

At 1021 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 98.08, slightly higher than 98.14 on both Monday and Friday.  (Gowri Lakshmi)

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India Rupee: Rises on likely inflows, dollar demand from importers caps gains

 

	AT 0934 IST	AT 0900 IST	HIGH	LOW	PREVIOUS (AT 1530 IST)
Spot rupee per $1	85.9750	86.0125	85.9450	86.0125	86.0650

 

MUMBAI – The rupee rose against the dollar Tuesday due to likely foreign fund inflows, dealers said. However, demand for dollars from importers limited the rupee's rise, dealers said. "The gap-up in the morning is probably because some foreign banks sold for the QIP (qualified institutional placement) for Biocon," a dealer at a state-owned bank said. The rupee was trading around 86.16 a dollar in the non-deliverable forwards market before the market opened at 86.0125 against the greenback. 

 

The rupee was supported as foreign banks sold the greenback for the QIP of pharamcueticals company Biocon Ltd., which announced the opening of its QIP Monday. The company informed exchanges that it would raise INR 4.5 billion through the QIP, and set the floor price at INR 340.2 per share. Kotak Mahindra Capital, Goldman Sachs and Bank of America Securities are advising on the capital raise, Moneycontrol reported, citing sources. 

 

The rupee's gains were capped as a few importers purchased the greenback, wary of further rise in crude oil prices, dealers said. However, they said that the panic among investors had eased and excessive demand for dollars from oil marketing companies was no longer there. Oil prices rose over 1% Tuesday owing to the conflict between Iran and Israel. 

 

An Israeli strike hit Iran's state media Monday, and the head of the United Nations nuclear watchdog hinted at "extensive damage" to Iran's biggest uranium enrichment plant. Iran has urged Qatar, Oman and Saudi Arabia to press US President Trump to use his influence on Israel to reach an immediate ceasefire with Iran in return for flexibility by Tehran in its nuclear negotiations with Washington, Reuters reported. 

 

At 0944 IST, the August Brent Crude contract on the Intercontiental Exchange was at $73.59 per barrel, a tad higher than $73.23 per barrel on Monday and down from $74.23 per barrel Friday. In early trade, crude prices rose to a high of $74.85 per barrel. "There is less panic now, since crude has come down a little bit, some importers are buying now... but is highly likely crude prices are only go upwards from here," the dealer said. 

 

The dollar index remained steady ahead of the monetary policy announcement by the US Federal Reserve late Wednesday, with the central bank widely expected to maintain status quo and keep the Fed Funds rate at 4.25-4.50%. At 0947 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 98.10, little changed from 98.14 on Monday and Friday. 

 

During the day, the rupee is seen moving in a range of 85.80 to 86.20 a dollar. Dealers peg key immediate resistance for the Indian unit at 85.80 against the greenback.  (Gowri Lakshmi)

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India Rupee: Expected range for rupee - Jun 17

 

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

 

PARTICIPANT	SUPPORT	RESISTANCE
Private sector bank	86.50	85.80
Private sector bank	86.30	86.10
Foreign bank	86.50	86.30
Brokerage firm	86.65	86.35
Brokerage firm	86.30	85.75

 

 

 

 

 

 

 

 

 

(Gowri Lakshmi and Pratiksha)

 

End

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

 

Edited by Rajeev Pai

 

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