More Stories

Informist, Friday, Jun. 27, 2025

By Gowri Lakshmi 

MUMBAI – The rupee logged its biggest weekly rise in over two years and ended at a three-week high against the dollar Friday due to persistent and significant foreign fund inflows into domestic financial markets, dealers said. Sustained weakness in the dollar index and relatively weak crude oil prices also supported the rupee, dealers said.

"Rupee seems to be on a parole. Every factor which affects rupee is in support of it and now it has strengthened too much," a dealer at a private-sector bank said. "Market is now waiting for a major pushback to 86 (a dollar)."

After rising to an over two-week high of 85.4275, the rupee settled at 85.4750 against the greenback, sharply up from its previous close of 85.7050. The rupee moved in a range of 22 paisa during the day. On a weekly basis, the rupee rose 1.3% against the US currency.

Other Asian currencies also rose against the greenback due to the weak dollar index, improvement in investor sentiment after de-escalation of tensions in West Asia, and optimism on trade talks with the US ahead of the Jul. 9 tariff deadline. The Asian currencies rose 0.1-0.3%, with the Indian rupee being the biggest gainer.

The rupee opened sharply higher at 85.5100 against the dollar due to a weak dollar index, which is struggling to gain traction amid rising worries over the Federal Reserve's rate outlook and as market participants look forward to ease in trade relations ahead of the Jul. 9 tariff deadline by the US, dealers said.

The dollar index declined to an over three-year low after US President Donald Trump stood by his strong "criticism" of US Federal Reserve Chair Jerome Powell and urged for an interest rate cut soon. The odds of a 25-basis-point rate cut by the US Federal Open Market Committee in July are 20.7%, as per the CME FedWatch tool. For September, the odds of a 25-bps cut are 74.9%, while those of a 50-bps cut are 19.1%.

Data published Thursday showed the US economy contracted at a faster pace in Jan-Mar, with GDP contracting 0.5% on year as per the third estimate of the Commerce Department's Bureau of Economic Analysis. The latest data adds to the recent slew of weaker-than-expected economic data from the US, where worries of a softening labour market and a recession looms.

At 1530 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 97.26, broadly steady from 97.35 Thursday and marginally lower than 97.71 Wednesday. Market participants now await the US personal consumption expenditure index for May, due later in the day.

Sentiment for the rupee also improved after Trump hinted at "a very big trade deal" between Washington and New Delhi as negotiations continue for an agreement before the Jul. 9 tariff pause deadline, dealers said.

"...We just signed with China yesterday. We are having some great deals. We have one coming up, maybe with India. Very big one. Where we're going to open up India. In the China deal, we are starting to open up China," Trump said.

Market participants across the globe gave a sigh of relief after the White House Thursday hinted that Trump might extend the tariff deal deadline. US Press Secretary Karoline Leavitt said the date was "not critical". "The president can simply provide these countries with a deal if they refuse to make us one by the deadline," Leavitt said.

The rupee was also supported as banks sold the greenback on behalf of foreign portfolio investors looking to invest in domestic financial markets, dealers said. So far in June, overseas investors have bought around $1.4 billion worth of Indian stocks. On Friday, the benchmark stock indices, the Nifty 50 and the BSE Sensex, ended 0.3% and 0.4% higher, respectively. Some foreign fund inflows were also related to the reorganisation of the Nifty 50 index, effective Friday.

Some banks also sold dollars on behalf of overseas investors for the initial public offerings of domestic companies, dealers said. The public issue of HDB Financial Services opened Wednesday and closes Friday. According to data from BSE, the IPO has received over $7 billion from overseas investors. This lifted the rupee to the day's high of 85.4275 a dollar, dealers said.

However, the gains of the rupee were capped as importers rushed to buy dollars in order to meet their month-end payment obligations, dealers said. Some importers also purchased dollars to take advantage of the lucrative dollar/rupee levels, dealers said.

They said even though importers purchased the greenback for the attractive dollar/rupee levels, most of them did not buy aggressively anticipating a further rise in the rupee. "The flows have been pretty significant that the dollar demand did not weigh much on the rupee," a currency trader at a brokerage firm said.

FORWARDS

The dollar/rupee forward premiums ended lower across the curve Friday as banks sold the greenback for forward delivery on behalf of exporters for their quarter-end payment requirements, dealers said. However, a fall in the benchmark 10-year US Treasury yield checked the downward move of premiums, dealers said. Forwards of a currency pair are reflective of the interest rate differential between the two countries.

The dollar/rupee TOM-SPOT swap rate rose to a high of 1.95 paise, or 12.68% on an annualised basis, Friday. This is the highest since Mar. 27. The annualised rate includes the day's highest annualised implied interest rate differential of 8.32% and secured overnight financing rate of 4.36%. While the swap rate is usually high at the end of the quarter due to the balance sheet requirements of banks, dealers said, this time the rates shot up because of excess dollar in the system.

"Since this was quarter-end, it (swap rates) usually is high, but this time it was sharply up because of IPOs etc., so market was flushed with dollars," a dealer with a foreign bank said.

At 1530 IST, the premium on the one-year, exact-period dollar/rupee forward contract was 168.02 paise, against Thursday's close of 171.00 paise. On an annualised basis, the premium was 1.96%, down from Thursday's 1.99%.

OUTLOOK

The currency market is shut Saturday. On Monday, the rupee will take cues from the movement of crude oil prices and the dollar index, dealers said. The rupee will also take cues from the movement of the offshore Chinese yuan, they said. The rupee may continue to extend its gains owing to improving investor sentiment and easing global geopolitical tensions.

However, the rupee may come under some pressure as importers are likely to buy dollars to take advantage of the lower dollar/rupee levels, they added. The rise of the rupee may also be capped as the Reserve Bank of India is likely to purchase dollars through public sector banks to shore up its dollar reserves, dealers said.

During the day, the rupee is seen moving in a range of 85.30-85.90 against the greenback. Dealers see immediate technical resistance for the Indian currency at 85.30 a dollar.

India Rupee - World FX: Dollar index stays weak; US GDP contracts in Jan-Mar

MUMBAI – The dollar index remained weak, unable to gain much traction, after falling to an over three-year low Thursday, following comments by US President Donald Trump where he reiterated his strong "criticism" of US Federal Reserve Chair Jerome Powell and urged for an interest rate cut soon. The US currency fell on rising expectation of an early rate cut, with most pricing in a 25-basis-point cut in September. 

Data published Thursday showed the US economy contracted at a faster pace in Jan-Mar, with GDP contracting 0.5% on year, as per the third estimate of the Commerce Department's Bureau of Economic Analysis. Earlier, GDP was reported to have contracted 0.2%. This boosted market participants' expectations of an early rate cut in the US. The odds of a 25-basis-point rate cut by the US Federal Open Market Committee in July were 20.7%, as per the CME FedWatch tool. For September, the odds of a 25-bps cut are 74.9%, while those of a 50-bps cut are 19.1%.

At 1530 IST, the dollar index which measures the strength of the dollar against a basket of six major currencies, was at 97.29, little changed from 97.35 Thursday and a tad lower than 97.71 Wednesday. Market participants now await the US personal consumption expenditure index for May, due later in the day. 

The Australian dollar was flat and the New Zealand dollar was up 0.1% against the greenback. The Pound sterling surged to a three-year high Thursday and hovered near the same levels on Friday due to the weak dollar index. The Swiss franc rose 0.2% against the greenback. 

The euro traded flat against the greenback. The eurozone economic sentiment for June fell to 94 in June due to detereorating industry confidence. The Canadian dollar was flat ahead of the GDP data for March quarter, due later in the day. 

The Japanese yen was also flat against the US currency. Data published earlier in the day showed Japan's unemployment rate stood at 2.5% in May. The headline Tokyo consumer price index eased 3.1% on year in June from 3.4% the month prior.  (Gowri Lakshmi)

India Rupee: Premiums fall as exporters sell fwd dollars for qtr-end needs

MUMBAI – The dollar/rupee forward premiums fell across the curve Friday as banks sold the greenback for forward delivery on behalf of exporters for their quarter-end payment requirements, dealers said. However, a fall in the benchmark 10-year US Treasury yield limited the downward move of premiums, dealers said. 

"There is some receiving we are seeing because of quarter-end, but largely if you see, the sentiment has been of paying only in the last few days," a dealer with a state-owned bank said. A rise in the banking system liquidity also pushed dollar/rupee forward premiums down. The net liquidity absorbed by the central bank--a proxy for systemic liquidity surplus--stood at INR 2.71 trillion on Thursday, up from INR 2.48 trillion Wednesday.

On an annualised basis, the one-year exact-period dollar/rupee forward premium was 1.98% at 1426 IST, down from 2.00% Thursday. On an absolute basis, the premium was 169.03 paise, down from 171.00 paise Thursday. 

The yield on the 10-year US Treasury note fell three basis points to settle at 4.26% Thursday. The yield fell on worries over US President Donald Trump's criticism of Federal Reserve chair Jerome Powell. Market participants now await the release of US unemployment data next week for further cues around the interest rate trajectory in the world's largest economy. 

While there was a fall in dollar/rupee forward premiums Friday, dealers did not expect premiums to continue falling much on strengthening expectations of a sooner rate cut in the US. "I don't think it will come down much, probably the least it could come is till 1.90%, but then paying pressure would be present," the dealer with the state-owned bank said. 

A rate cut in the US would expand its interest rate differential with India, pushing forward premiums higher, dealers said. Forwards of a currency pair are reflective of the interest rate diferential between the two countries.  (Sourabh Kumar)

India Rupee: Off highs on importers' dlr buys; foreign fund inflows support

MUMBAI – The rupee was off highs as banks purchased the greenback on behalf of importers, dealers said. However, banks' dollar sales likely for foreign fund inflows into Indian financial markets supported the rupee, dealers said. The rupee rose to an over two-week high of 85.4600 a dollar earlier in the day. 

Banks purchased the greenback on behalf of importers, who wanted to meet their month-end payment obligations, dealers said. Some importers also purchased dollars to take advantage of the lucrative dollar/rupee levels, dealers said. They said even though importers purchased the greenback for the attractive dollar/rupee levels, most of them did not buy aggressively anticipating a further rise of the rupee. 

"It's the month-end, so payment related orders are getting placed," a dealer at a private sector bank said. "Moreover, levels are great for importers, they are buying but again not any aggressive hedging." 

The rupee was continuously boosted by foreign fund inflows into the domestic stock market, ahead of reorganisation of the Nifty 50 index, which will come into effect after market hours Friday. Few foreign fund inflows were also likely related to the initial public offerings of domestic companies, dealers said. The public issue of HDB Financial Services Ltd. opened Wednesday and will close later in the day. At 1314 IST, the benchmark stock indices, the Nifty 50 and the BSE Sensex, were up 0.3% and 0.2%, respectively. 

A weak dollar also supported the rupee significantly, dealers said. The dollar fell to an over three-year low Thursday after US President Donald Trump reiterated his strong "criticism" of US Federal Reserve Chair Jerome Powell and urged for an interest cut soon. At 1317 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 97.21, broadly steady from 97.35 Thursday and a tad lower than 97.71 Wednesday. 

For the rest of the day, the rupee is seen moving in a range of 85.40 and 85.75 against the greenback. Dealers peg immediate technical resistance for the Indian currency at 85.40 a dollar. (Gowri Lakshmi)

India Rupee: Technical levels for rupee - Jun 27

MUMBAI – At 1131 IST, the rupee was at 85.5400 per dollar. At 0900 IST, the rupee was at 85.5100 a dollar, against the previous close of 85.7050. Following are the key support and resistance levels for the rupee as provided by leading banks and brokerages:

(Sourabh Kumar and Gowri Lakshmi)

India Rupee - Asia FX: Mixed; dollar stays weak, US GDP falls in Jan-Mar

MUMBAI – Asian currencies were mixed against the dollar as market participants assessed economic data from the US and the interest rate outlook of the US Federal Reserve amid rising expectations of an early rate cut in the US, which led to a further weakness of the US currency. The dollar index fell to an over three-year low of 97 Thursday, and was near that level early Friday. The dollar index, which measures the strength of the greenback against a basket of six major currencies, was 97.32, little changed from 97.35 Thursday, and down from 97.71 Wednesday.

The odds of a 25-basis-point rate cut by the US Federal Open Market Committee in July were 20.7%, as per the CME FedWatch tool. For September, the odds of a 25-bps cut are 72.2%, while those of a 50-bps cut are 18.2%.

Data released on Thursday showed that the US economy contracted faster in Jan-Mar than previously reported. US GDP contracted 0.5% on year in Jan-Mar, as per the third estimate of the Commerce Department's Bureau of Economic Analysis. Earlier, GDP was reported to have contracted 0.2%. This boosted market participants' expectations of an early rate cut in the US, which weighed on the US dollar.

Initial claims for state unemployment benefits in the US fell to a seasonally adjusted 236,000 in the week ended Saturday, lower than economists' forecast of 245,000 in a Reuters poll. While the data shows a fall in unemployment benefits, it includes a day of Juneteenth National Independence Day holiday. Continuing claims, where people receive unemployment benefits after an initial week of aid, rose 37,000 to a seasonally adjusted figure of 1.97 million in the week ended Jun. 14. This was the highest in over three years.

The Taiwan dollar was up 0.8% owing to the weakness in the US currency. The South Korean won was down 0.2%. South Korea's exports are expected to rebound due to strong tech demand after a decline in May, a Reuters poll showed Friday. Exports from South Korea are forecast to have risen 4.7% this month, after a 1.3% fall in May. South Korea's inflation is expected to be 2.1% on year in June, up from 1.9% in May, as per a poll by the Wall Street Journal.

South Korean President Lee Jae Myung, in his first parliamentary address, said the "supplementary budget" of $22.4 billion centres on universal cash handouts to all 52 million South Koreans-a crucial step toward bridging the socio-economic divide. "If the economic slowdown persists, the window of opportunity is closing, while competition and conflict will intensify, which is a vicious cycle," Lee said. "We should create a new driver for growth and open the door to fair growth to share the opportunities of growth and the fruits of it."

The Philippines peso was up 0.1% after the Philippines' exports jumped 15.1% on year in May, accelerating from an upwardly revised 7.6% rise the month prior and hitting a 13-month high.

The Indonesian rupiah was flat, and the Malaysian ringgit rose 0.1% against the greenback. The Thai baht was down 0.2% against the US currency. Thai Finance Minister Pichai Chunhavajira will visit the US next week for trade negotiations in an effort to strike a trade deal ahead of the Jul. 9 deadline.  (Gowri Lakshmi & Sourabh Kumar)

India Rupee: Sharply up on weak dlr index, FII inflows before Nifty 50 rejig

MUMBAI – The rupee rose sharply against the dollar Friday owing to sustained weakness in the dollar index and continuous foreign fund inflows, likely ahead of the rejig of the Nifty 50 index, dealers said. US President Donald Trump's hints at a potential trade deal with India also improved investor sentiment, supporting the rupee, dealers said. 

"It is too early to be sure about the India-US trade but overall, the sentiment has improved," a dealer at a private sector bank said. "General weakness in the dollar index along with some inflows is a strong support for the rupee." 

The dollar index continues to be weak, recovering only marginally, after falling to an over three-year low Thursday, dealers said. The dollar weakened after US President Donald Trump reiterated his strong "criticism" of US Federal Reserve Chair Jerome Powell and urged for an interest cut soon. The US currency fell on rising expectations of an early rate cut, with most pricing in a 25-basis-point cut in September. 

Data published Thursday showed the US economy contracted at a faster pace in Jan-Mar, with GDP contracting 0.5% on year, as per the third estimate of the Commerce Department's Bureau of Econmic Analysis. Earlier, GDP was reported to have contracted 0.2%. This boosted market participants' expectations of an early rate cut in the US. The odds of a 25-basis-point rate cut by the US Federal Open Market Committee in July were 20.7%, as per the CME FedWatch tool. For September, the odds of a 25-bps cut are 74.9%, while those of a 50-bps cut are 19.1%.

At 0941 IST, the dollar index which measures the strength of the dollar against a basket of six major currencies, was at 97.33, unchanged from Thursday and a tad lower than 97.71 Wednesday. 

The rupee also was lifted as banks sold the greenback on behalf of foreign portfolio investors looking to invest in domestic financial markets, dealers said. So far in June, overseas investors have bought around $1.4 billion worth of Indian stocks. A few foreign fund inflows were also related to the reorganisation of the Nifty 50 index, effective after market hours Friday.  

The rupee was also supported as investor sentiment improved after Trump hinted at "a very big trade deal" between Washington and New Delhi as negotiations continue to carve out an agreement before the Jul. 8 tariff pause deadline. 

During the day, the rupee is seen moving in the range of 85.40-85.90 a dollar. Dealers peg key immediate resistance for the Indian currency at 85.40 against the greenback.  (Gowri Lakshmi)

India Rupee: Expected range for rupee - Jun 27

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 and Sourabh Kumar)

End

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

Edited by Ashish Shirke

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.

Informist Media Tel +91 (22) 6985-4000 

Send comments to feedback@informistmedia.com

© Informist Media Pvt. Ltd. 2025. All rights reserved.