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Informist, Friday, Jun. 20, 2025

By Gowri Lakshmi

MUMBAI – After moving in a relatively narrow range of just under 12 paise, the rupee ended higher against the dollar Friday, owing to foreign fund inflows and a fall in crude oil prices, dealers said. However, some oil marketing companies and other importers purchased the dollar, which prevented the rupee from rising further, dealers said. 

"We were not expecting this flow or rupee to appreciate today," a currency trader at a brokerage firm said. "The flows into IPOs (initial public offerings) were lined up next week, this likely happened as some flows may have hit after the US holiday (on Thursday)."

The rupee appreciated 0.2% against the greenback and ended the week at 86.5850 a dollar, up from the previous close of 86.7225. Most Asian currencies also rose against the greenback due to the sustained weakness in the dollar index, dealers said. Other Asian currencies gained 0.1-0.9%, with the South Korean won being the best-performing currency among the regional peers. 

The rupee started the day on a positive note, opening at 86.6200 a dollar as foreign banks sold the greenback on behalf of overseas investors, looking to invest in the domestic stock market, dealers said. Benchmark indices, the Nifty 50 and the BSE Sensex, ended 1.3% each higher on Friday.

Some dealers said efforts at de-escalating the tensions in West Asia supported the rupee as investor sentiment turned positive, even as they awaited further clarity. European officials and several other world leaders came together and urged Iran and Israel to de-escalate and called for immediate negotiations. 

Russian President Vladimir Putin and Chinese President Xi Jinping also expressed concern and condemned Israel on Thursday, while seeking de-escalation. Meanwhile, US President Donald Trump said he would decide within two weeks on whether the US will join Israel in the conflict. Israel-Iran entered its second week of military conflict, with Israel bombing Iranian nuclear facilities and Iran retaliating with missile attacks, striking an Israeli hospital Thursday. 

The rupee was also supported by a fall in crude oil prices, dealers said. Crude prices fell nearly 2% in early trade Friday on expectations of a hike in output by the Organization of the Petroleum Exporting Countries and its allies, dealers said. "To ensure and balance it, we need to return to the market part of those voluntary reductions that were adopted in 2023," Russian Deputy Prime Minister Alexander Novak said. Eight members of the OPEC+ led by Russia are unwinding the voluntary production cuts of 2.2 million barrels per day. 

At 1530 IST, the August Brent crude contract on the Intercontinental Exchange was at $77.06 per barrel, down from its previous close of $78.85 per barrel but unchanged from $76.70 per barrel Wednesday. 

However, the fall in crude oil prices prompted a few oil marketing companies to purchase the greenback in large quantities, wary of a sharp and sudden rise in crude oil prices amid ongoing uncertainties, dealers said. A few importers also purchased the greenback, fearing a further fall in the Indian unit, dealers said. 

"Importers were mostly passive today, but a few did buy at every dip (in dollar/rupee), which essentially limited the rise in the rupee," a dealer at a state-owned bank said. 

The dollar index remained broadly weak, unable to gain traction as investors await further clarity on geopolitical tensions in West Asia. At 1530 IST, the dollar index, which measures the dollar's strength against a basket of six major currencies, was at 98.62, broadly steady from the previous close of 98.78 Thursday and 98.85 Wednesday.

FORWARDS 

The one-year exact-period dollar/rupee forward premium ended higher Friday after rising to a one-week high as banks purchased forward dollars on behalf of importers, dealers said. Importers purchased forward dollars amid concerns that a decline in the spot dollar/rupee level could drive up forward premiums, according to the dealers. The one-year exact-period dollar/rupee forward premium hit a one-week high of 1.90% on an annualised basis.

The yields on the benchmark 10-year US Treasury note remained broadly unchanged as investors and market participants await further clarity on the ongoing geopolitical tensions in West Asia, the dealers said. Forwards of a currency pair are reflective of the interest rate differential between the two countries. 

An increase in the banking system liquidity surplus limited dollar/rupee forward premiums from rising further. The Reserve Bank of India Thursday absorbed INR 3.14 trillion, sharply higher than INR 2.87 trillion Wednesday. 

At 1530 IST, the premium on one-year exact-period dollar/rupee forward was 1.88%, against the previous close of 1.86%. On an absolute basis, the premium was 163.05 paise, against 161.57 paise at Thursday's close.

OUTLOOK

Markets are shut on Saturday. On Monday, the rupee will take cues from the movement in crude oil prices and offshore Chinese yuan, dealers said. The rupee will also take cues from the movement in the dollar index, they said. Market participants will closely watch the developments in West Asia over the weekend and any comments by Trump regarding tariffs or the Israel-Iran geopolitical conflict. 

"Still, clarity is sought on de-escalation. Till that time, the rupee will trade in the range of 86.30 to 87.00 against the dollar. If signs of de-escalation are seen in the Israel-Iran conflict, one can expect the rupee to appreciate back to 86.00 against the greenback," another currency trader at a brokerage firm said.

Dealers expect the rupee to be supported by foreign fund inflows, likely relating to multiple IPOs opened for subscription. However, the rupee may come under some pressure as importers are likely to purchase the greenback, fearing a sharp fall of the rupee, dealers said. Should the rupee come under immense pressure and inch toward 86.90 a dollar, public-sector banks will likely step in with dollar sales on behalf of the Reserve Bank of India to prevent the rupee from falling sharply, dealers said. 

During the day, the rupee is seen moving in a range of 86.30-86.80 against the greenback. Dealers peg immediate technical resistance for the Indian currency at 86.45 a dollar. 

India Rupee - World FX: Pound sterling up 0.2%; BoE holds rates steady Thu

MUMBAI – The pound sterling was up 0.2% against the US dollar after data published Friday showed UK's consumer confidence improved in June despite remaining fragile amid ongoing geopolitical tensions in West Asia. The Gfk consumer sentiment rose by 2 points this month but continued to remain in the negative territory of -18. A reading above zero indicates optimism and that below zero indicates pessimism.

However, UK retail sales fell the sharpest since December 2023 in May because of weak demand. Retail sales fell by 2.7% last month, against analyst expectations of a 0.5% rise in a poll by Reuters. The Bank of England Thursday held rates steady at 4.25% while leaving the door open for further interest rate cuts in the future. 

The Japanese yen was down 0.1% against the greenback. Data released earlier in the day showed Japan's core inflation hit an over two-year high in May, exceeding the central bank's target of 2%, keeping it under pressure to resume tightening of the monetary policy cycle despite pressure from US tariffs. Japan's core consumer price index rose 3.7% on year in May, slightly above the analyst forecast of 3.6% in a Reuters poll. The core inflation, which excludes fresh food and fuel, rose 3.3% on year last month.

The minutes of Bank of Japan's monetary policy meeting showed that policymakers agreed on the need to keep increasing the still-low interest rates, but saw the need for a pause due to the ongoing uncertainty over US tariffs. The minutes released Friday were for the Apr. 30-May 1 meeting, where they held the rates steady at 0.5%. "The BOJ must maintain a wait-and-see approach until developments in US tariff policy become somewhat settled," the minutes said citing a BoJ Monetary Policy Committee member.

The euro was up 0.3% against the greenback ahead of the consumer confidence flash estimates for June, due later in the day. Data published Friday showed producer prices in Germany, the Eurozone's largest economy, fell by 1.2% in May.

The Australian dollar and the New Zealand dollar were up 0.2% and 0.1%, respectively, against the US currency after People's Bank of China kept its interest rates steady, as was widely expected. Any change in the Chinese economy directly impacts the currencies of Australia and New Zealand due to their close bilateral trade relations.

The Canadian dollar was flat against the US currency ahead of producer price index data and retail sales data due later in the day. The Swiss franc was up 0.1% likely on safe-haven inflows amid ongoing geopolitical uncertainties in West Asia.

The dollar index remained broadly weak as investors await further clarity on developments in West Asia. US President Donald Trump Thursday said potential "US involvement" in the ongoing Israel-Iran conflict will be decided in two weeks. Countries across the world have come together to condemn the ongoing Iran-Israel conflict.

"Now is the time to put a stop to the grave scenes in the Middle East and prevent a regional escalation that would benefit no one," UK's Foreign Minister David Lammy said ahead of the joint meeting with Iranian Foreign Minister Abbas Araqchi. Russian President Vladimir Putin and Chinese President Xi Jinping also expressed concern and condemned Israel while agreeing that de-escalation was needed. European officials also sought to draw Tehran back to the negotiation table.

At 1530 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 98.57, against 98.78 Thursday and 98.85 Wednesday.  (Gowri Lakshmi)

 India Rupee: Premium rises to 1-week high on importers' forward dollar buys

MUMBAI – The one-year exact-period dollar/rupee forward premium rose to a one-week high Friday as banks purchased forward dollars on behalf of importers, dealers said. Importers purchased forward dollars amid concerns that a decline in the spot dollar/rupee level could drive up forward premiums, according to the dealers.

"There are some importer paying at these levels, they fear the premium levels will go up given the rate adjustment in dollar/rupee," a currency trader at a brokerage firm said. The one-year exact-period dollar/rupee forward premium hit a one-week high of 1.90% on an annualised basis. At 1354 IST, the premium was 1.90%, against the previous close of 1.86%. On an absolute basis, the premium was 164.28 paise, against 161.57 paise at Thursday's close.

The yields on the benchmark 10-year US Treasury note remained broadly unchanged as investors and market participants await further clarity on the ongoing geopolitical tensions in West Asia, the dealers said.

Continuing from last week, Israel struck Iranian nuclear facilities Thursday followed by a response from Iran, which launched multiple missiles and drones, hitting an Israeli hospital. Meanwhile, US President Donald Trump said he would decide within two weeks whether the US would join Israel in action against Iran.

The dollar/rupee forward premium is expected to rise further to about 1.95%, according to a few dealers. "I think 1.95% will act as a support, and if it sustains above 1.90% then it could very well go beyond 2.0%, should the spot dollar/rupee rise," a dealer with a foreign bank said. 

An increase in the banking system liquidity surplus limited dollar/rupee forward premiums from rising more. The Reserve Bank of India Thursday absorbed INR 3.14 trillion, sharply higher than INR 2.87 trillion Wednesday.  (Gowri Lakshmi)

India Rupee: Remains up on FX flows into equity; importer dlr buys cap gains

MUMBAI – The rupee remained higher against the dollar Friday owing to foreign fund inflows, likely into equities, dealers said. However, importers' dollar buys prevented the rupee from rising further, dealers said. The rupee touched a high of 86.5450 against the dollar earlier in the day. 

"Some good inflows are there, and we can expect further rise next week owing to IPO (initial public offering) flows," a dealer at a private sector bank said. At 1156 IST, both the benchmark indices Nifty 50 and the BSE were up 1% each. This supported the rupee, according to some dealers. However, on a net basis, foreign portfolio investors have been withdrawing their funds and are moving to safe-haven assets. So far in June, overseas investors have withdrawn $1.9 billion from Indian financial markets. 

The rupee came under pressure as oil marketing companies and other importers purchased the greenback, dealers said. Most dealers said that despite a fear of a further fall in the rupee and a fear of potential rise in crude oil prices, a majority of importers remained on the sidelines waiting for further clarity.

"Oil prices falling have not received as much reaction from the market," said the dealer at the private sector bank. "While importers are purchasing (dollars), they are mostly curtailed," said another dealer at a private sector bank. 

At 1201 IST, the August Brent crude contract was at $76.60 per barrel, down from $78.85 per barrel Thursday and $76.7 per barrel Wednesday. Crude prices fell on expectations of a hike in output by the Organization of the Petroleum Exporting Countries and its allies, dealers said. A Russian official said on Thursday that OPEC+ member states should proceed with plans to hike output, noting the rising summer demand.

The dollar index continued to remain weak as investors await further cues amid ongoing geopolitical tensions in West Asia and the likelihood of US' direct involvement in the Israel-Iran conflict. At 1206 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 98.63, broadly steady from 98.78 Thursday and 98.85 Wednesday. 

For the rest of the day, the rupee is seen trading between 86.50 and 86.70 against the greenback. Dealers peg immediate technical resistance for the Indian unit at 86.50 a dollar.  (Gowri Lakshmi)

India Rupee - tAsia FX: Most units up; China central bank holds rates steady

MUMBAI - Most Asian currencies traded higher against the dollar Friday as the dollar index remained broadly weak, unable to gain traction as investors await further clarity on geopolitical tensions in West Asia. US President Donald Trump Thursday said potential "US involvement" in the ongoing Israel-Iran conflict will be decided in two weeks. 

World leaders are coming together calling for immediate negotiations and diplomacy to bring stability in West Asian region. "Now is the time to put a stop to the grave scenes in the Middle East and prevent a regional escalation that would benefit no one," UK's Foreign Minister David Lammy said ahead of the joint meeting with Iranian Foreign Minister Abbas Araqchi. Russian President Vladimir Putin and Chinese President Xi Jinping also expressed concern and condemned Israel while agreeing that de-escalation was needed while European officials sought to draw Tehran back to the negotiation table. 

At 1022 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 98.59, broadly steady from the previous close of 98.78 Thursday and 98.85 Wednesday.

The offshore Chinese yuan rose 0.1% against the greenback. The People's Bank of China kept its benchmark lending rates unchanged Friday, as widely expected, after Beijing rolled out monetary easing measures a month earlier to boost the economy. The Taiwan dollar rose 0.5% against the greenback while the Malaysian ringgit was up 0.1%. Data published earlier in the day showed Malaysia's exports unexpectedly fell by 1.1% last month. In a Reuters poll, analysts expected exports to grow 7.5%. 

The Indonesian rupiah was flat against the greenback. The South Korean won jumped 0.9% against the greenback, tracking gains in domestic stock market. At 1026 IST, the benchmark index, KOSPI, was up 1.5%. 

The Philippine peso rose 0.4% against the US unit. The Philippine central bank on Thursday lowered its benchmark rates by 25 basis points to support growth. Bucking the trend, the Thai baht was down 0.1% against the greenback.  (Gowri Lakshmi)

India Rupee: Technical levels for rupee - Jun 20

MUMBAI – At 1035 IST, the rupee was at 86.5875 per dollar. At 0900 IST, the rupee was at 86.6200 a dollar, against the previous close of 86.7225. Following are the key support and resistance levels for the rupee as provided by leading banks and brokerages:

(Gowri Lakshmi)

India Rupee: Rises on likely FX inflows, easing of geopolitical tensions

MUMBAI – The rupee rose against the dollar Friday due to likely foreign fund inflows, dealers said. The rupee was also supported by de-escalation of tensions in West Asia, dealers said.

"IPO inflows are not there yet. Some foreign fund inflows are there after the US holiday yesterday (Thursday) and major reason for appreciation is some easing in the tensions in West Asia. Nothing major against Iran was said by (Donald) Trump," a dealer at a private sector bank said. At 0942 IST, the benchmark Nifty 50 and the BSE Sensex were up 0.3% each. 

The rupee was supported as investor sentiment turned slightly positive after various countries pushed for diplomacy and de-escalation of tensions between Iran and Israel as the conflict entered its second week, dealers said. Officials from Europea sought to draw Tehran back to negotiations, while US President Donald Trump said "any decision on the US involvement" would be made within the next two weeks.

Israel attacked Iran last Friday, saying Tehran was emerging as a potential nuclear threat. In the latest development, Israel bombed Iranian nuclear facilities, while missiles fired by Iran struck an Israeli hospital. "Now is the time to put a stop to the grave scenes in the Middle East and prevent a regional escalation that would benefit no one," UK's Foreign Minister David Lammy said ahead of the joint meeting with Iranian Foreign Minister Abbas Araqchi. 

Russian President Vladimir Putin and Chinese President Xi Jinping also expressed concern and condemned Israel on Thursday while agreeing that de-escalation was needed. Putin and Xi "strongly condemn Israel's actions, which violate the UN Charter and other norms of international law", Putin's aide said. "Both Moscow and Beijing fundamentally believe that there is no military solution to the current situation and issues related to Iran's nuclear programme."

The rupee, however, came under pressure as some importers purchased the greenback, fearing further fall of the rupee, dealers said. Some dealers said the rupee was also weighed down by demand for dollars relating to the reference-rate fixing window. 

During the day, the rupee is seen moving in a range of 86.50-86.90 against the dollar. Dealers peg immediate technical resistance for the Indian unit at 86.50 a dollar.  (Gowri Lakshmi) 

India Rupee: Expected range for rupee - Jun 20

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:

(Gowri Lakshmi)

End

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

Edited by Saji George Titus

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