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Informist, Thursday, Jul. 10, 2025

By Pratiksha

NEW DELHI – The Indian rupee Thursday ended off its day's high against the dollar as banks bought dollars for importers, led by oil marketing companies, dealers said. The rupee rose to a high of 85.5200 a dollar earlier in the day and went on to settle at 85.6350, slightly higher than Wednesday's close of 85.6725.

The rupee was supported by dollar sales by foreign banks on behalf of foreign portfolio investors amid increasing hopes of a trade deal between India and the US, dealers said. "Most of the selling (of dollars) came due to the whole sentiment around the trade deal. People are confident it will come in soon," a dealer at a foreign bank said.

The rupee began the day on a positive note, in line with its Asian peers, owing to a subdued reaction to US President Donald Trump's latest tariff announcements. However, the Indian currency was the second worst performer among its emerging market peers on Thursday. Other Asian currencies gained 0.1-0.3% against the dollar. The Taiwan dollar fell 0.3%. 

In the latest development on the tariff front, Trump Thursday said the US will impose a 50% tariff on goods imported from Brazil, starting Aug. 1. Trump also announced a 50% tariff on copper imports, effective Aug. 1. On Wednesday, he also announced reciprocal tariffs on seven nations, including Sri Lanka, Libya, Iraq, Moldova, Algeria, Brunei and the Philippines.

The dollar index was broadly steady as investors shrugged off Trump's latest tariff announcements. At 1530 IST, the dollar index, which measures the strength in the greenback against a basket of six major currencies, was at 97.40, against 97.47 Wednesday and 97.51 Tuesday.

Shortly after opening, the Indian unit rose further and touched the day's high as foreign banks sold dollars on behalf of FPIs, looking to invest in Indian markets amid growing optimism over a trade deal between India and the US, dealers said. A delegation of Indian government officials are likely to visit the US soon for negotiation on the proposed trade deal, a commerce ministry official said on Thursday.

Some banks also sold dollars for foreign fund inflows into Indian corporates, which aided the Indian unit, according to dealers. However, noting the rise in the Indian unit, banks rushed to buy dollars on behalf of oil marketing companies and other importers, which helped the rupee erase a large portion of its gains, they said. "After yesterday's (Wednesday) strong rally (in dollar/rupee), some profit booking was also observed. The rupee is expected to trade within a range of 85.30 to 85.90," Jateen Trivedi, VP research analyst - commodity and currency at LKP Securities, said in a note. 

A fall in domestic equities also weighed on the Indian unit, dealers said. On Thursday, the Nifty 50 and the Sensex ended 0.5% and 0.4% lower, respectively.

Market participants are keenly waiting for further developements on the India-US trade deal and are refraining from placing large bets until there is a further clarity on the same. "With no US-India trade deal happening till date, markets are in perplex and are moving directionless as per the flows and also on lower volumes," said Anil Kumar Bhansali head of treasury and executive director at Finrex Treasury Advisors LLP. "The close was slightly higher than yesterday (Wednesday) with market still expecting the finalisation of the trade deal." 

FORWARDS

The one-year dollar/rupee forward premium ended slightly higher on Thursday due to an overnight fall in the 10-year benchmark US Treasury yield, dealers said. Forwards of a currency pair are reflective of the interest rate differential between two countries.

The benchmark 10-year US Treasury yield fell after strong demand at an auction of 10-year notes on Wednesday, easing concern about the "Sell America" narrative that previously led to a sell-off in Treasuries. The 10-year benchmark US Treasury yield ended at 4.34% Wednesday, against 4.42% Tuesday. 

Minutes of the US Federal Reserve's June meeting on Wednesday showed only a couple of officials felt interest rates could be reduced as soon as this month, with most remaining worried about the inflationary pressure from Trump's sweeping tariffs. The Federal Open Market Committee last month voted unanimously to leave rates unchanged at 4.25-4.50%.

Meanwhile, some banks stepped in to sell dollars for forward delivery, noting the relatively higher levels, which capped the rise in premiums, dealers said. The one-year dollar/rupee forward premium rose to 1.96% earlier in the day.

Volume in the market was lower than usual on Thursday, with market participants awaiting further developments on the India-US trade deal and more cues on the future trajectory of the US interest rate path, according to dealers. Market participants see strong technical support for the one-year dollar/rupee forward premium at 2.00%. 

At 1530 IST, the one-year exact period dollar/rupee forward premium was 1.95%, against 1.94% Wednesday. On an absolute basis, the premium was 166.97 paise, against 166.95 paise at the previous close. 

OUTLOOK

On Friday, the rupee will take cues from the movement in the dollar index and crude oil prices, dealers said. Market participants will keep a close eye on developments related to the India-US trade deal and other US tariff related news, they said. 

"If the trade deal (between India and US) is positive for us, the rupee may see a decent boost. I am seeing 85.00-84.80 kind of levels if that happens," a dealer at a private-sector bank said. "Till then, the rupee will continue trading in a range bound manner."

If the rupee convincingly falls below 86-per-dollar, dealers expect the Reserve Bank of India to step in through dollar sales and curb a sharp fall. During the day, the rupee is likely to move in the range of 85.40-85.90 against the dollar. Dealers peg immediate technical resistance for the rupee at 85.50 against the greenback. 

India Rupee - World FX: Dlr index steady; Brazil real slumps 2% on US tariff

NEW DELHI – The dollar index remained broadly steady on Thursday as investors were unfazed by US President Donald Trump's latest tariff announcements. Trump Thursday said the US will impose a 50% tariff on goods imported from Brazil starting Aug. 1. He also announced reciprocal tariffs on seven nations--Sri Lanka, Libya, Iraq, Moldova, Algeria, Brunei, and the Philippines Wednesday.

Trump also announced a 50% tariff on copper imports, effective Aug. 1, as part of his efforts to promote domestic mining and metal processing. At 1530 IST, the dollar index, which measures the strength in the greenback against a basket of six major currencies, was at 97.40, against 97.47 Wednesday and 97.51 Tuesday.

The Brazil real slumped 2.3% against the dollar owing to Trump's plan to impose a 50% tariff on goods imported from the country.

The euro rose 0.1% against the dollar after European Commission President Ursula von der Leyen survived a no-confidence vote in European Parliament Thursday. The no-confidence vote was tabled by mainly far-right lawmakers who said she and her team undermined trust in the European Union through unlawful activities. 

The pound sterling was up 0.2% against the greenback while the Japanese yen remained largely flat. Former top currency diplomat Masatsugu Asakawa Thursday said Japan was unlikely to face pressure from the US to intentionally appreciate the yen despite Trump's criticism of its large trade surplus with the US. 

The Australian dollar rose 0.4% against the US dollar, following an uptick in the Chinese yuan after China announced new measures Wednesday to support employment amid its ongoing trade war with the US. Given the strong trade ties between Australia and China, factors affecting China's economy often have a direct impact on Australia. The New Zealand dollar was up 0.3%.   (Pratiksha)

India Rupee: 1 yr forward premium rises slightly as US Treasury yields fall

NEW DELHI – The one-year dollar/rupee forward premium rose slightly on Thursday due to an overnight fall in the 10-year benchmark US Treasury yield, dealers said. Forwards of a currency pair are reflective of the interest rate differential between two countries.

"Forwards is tracking US yields but today the impact seems minimal. For the kind of fall we have seen in US yields, the rise (in forward premium) should have been much more," a dealer at a state-owned bank said. The benchmark 10-year US Treasury yield fell after strong demand at an auction of 10-year notes on Wednesday, easing concerns about the "Sell America" narrative that previously led to a sell-off in Treasuries. The 10-year benchmark US Treasury yield ended at 4.34% Wednesday, against 4.42% Tuesday. 

Minutes of the US Federal Reserve's June meeting on Wednesday showed only a couple of officials felt interest rates could be reduced as soon as this month, with most remaining worried about the inflationary pressure from President Donald Trump's sweeping tariffs. The Federal Open Market Committee last month voted unanimously to leave rates unchanged at 4.25-4.50%.

Meanwhile, some banks stepped in to sell dollars for forward delivery, noting the relatively higher levels, which capped the rise in premiums, dealers said. The one-year dollar/rupee forward premium rose to 1.96% earlier in the day. "I think people are not confident that Fed will go for rate cut even in Septemeber. This is why maybe we are seeing recieving everytime the levels are going up," a dealer at another state-owned bank said. 

Volume in the market was lower than usual on Thursday, with market participants awaiting further developments on the India-US trade deal and more cues on the future trajectory of the US interest rate path, according to dealers. Market participants see strong technical support for the one-year dollar/rupee forward premium at 2.00%. 

At 1435 IST, the one-year exact period dollar/rupee forward premium was 1.95%, against 1.94% Wednesday. On an absolute basis, the premium was 166.72 paise, against 166.95 paise at the previous close.  (Pratiksha)

India Rupee: Remains up on dollar sales by FPIs; India-US trade deal awaited

NEW DELHI – The rupee remained higher against the dollar as foreign banks sold the greenback on behalf of foreign portfolio investors, looking to invest in Indian markets amid growing optimism over a trade deal between India and the US, dealers said. 

"Risk appetite has improved so selling (of dollars) is on account of that. Seems like the trade deal can happen anytime now. So, we are seeing inflows due to that," a dealer at a private sector bank said. The rupee hit a high of 85.5200 a dollar earlier in the day. 

A delegation of Indian government officials are likely to visit the US soon for negotiation on the proposed trade deal, Informist reported citing a commerce ministry official on Thursday. In the latest development on the tariff front, US President Donald Trump Thursday said the US will impose a 50% tariff on goods imported from Brazil, starting Aug. 1. Trump also announced a 50% tariff on copper imports, effective Aug. 1. 

Market participants are keenly waiting for further developements on the India-US trade deal and are refraining from placing large bets until there is a further clarity on the same. "Everybody is keeping very light positions. There's no point in going big on either side till there is any cue on the trade deal front," a dealer at a state-owned bank said. 

However, some banks purchased the greenback on behalf of oil marketing companies and other importers which helped erase some of the gains for the Indian currency, dealers said. Some oil and other importers bought the greenback, noting the relatively lower dollar/rupee levels, they said. 

A slight fall in the dollar index also supported the Indian unit, according to dealers. At 1320 IST, the dollar index, which measures the strength in the greenback against a basket of six major currencies, was at 97.40, against 97.47 Wednesday and 97.51 Tuesday.

For rest of the day, the rupee is seen moving in a range of 85.40 to 85.80 against the greenback. Dealers peg key technical resistance for the rupee at 85.50 a dollar. (Pratiksha) 

India Rupee: Technical levels for rupee - Jul 10

MUMBAI – At 1037 IST, the rupee was at 85.5600 per dollar. At 0900 IST, the rupee was at 85.6100 a dollar, against the previous close of 85.6725. Following are the key support and resistance levels for the rupee as provided by leading banks and brokerages:

(Sourabh Kumar and Pratiksha)

India Rupee: Rises as banks sell dollars on hopes of US-India trade deal

MUMBAI – The rupee was trading higher in early trade Thursday as banks sold dollars on hopes of a US-India trade deal, dealers said. It was mostly foreign banks who were selling dollars, they said. They also sold the greenback on behalf of overseas clients for investment in Indian companies, dealers said.

"Foreign banks are selling, probably for positioning ahead of US-India trade deal," a dealer with a state-owned bank said. In the latest development on tariffs, Trump said the US will impose a 50% tariff on goods imported from Brazil, starting Aug. 1.

The dollar index was also relatively lower, which supported the rupee, dealers said. The dollar index, which measures the strength of the greenback against a basket of six major currencies, was 97.39 at 0931 IST, down from 97.47 Wednesday and 97.51 Tuesday. Amid uncertain trade policies of the US, the share of the dollar has fallen as the world's reserve currency.

International Monetary Fund data showed the share of dollar as the world's reserve currency fell in Jan-Mar, while that of the euro and the Swiss franc gained. The dollar's share declined to 57.7% at the end of March from 57.8% at the end of December. In the same period, the share of euro rose to 20.1% from 19.8%.

While a weak dollar supported the rupee, the Indian currency's rise was capped as a few importers, largely oil marketing companies, purchased dollars at relatively lower dollar/rupee levels. A slight rise in crude oil prices also prompted some oil marketing companies to purchase the greenback, which weighed on the Indian unit, dealers said.  (Sourabh Kumar)

India Rupee - Asia FX: Most up; Malaysia rate cut caps ringgit's gains

MUMBAI – Asian currencies rose against the dollar in early trade Thursday, with most of them rising 0.3%. The South Korean won was up 0.3% against the greenback after the Bank of Korea left its benchmark rates unchanged, as expected. The South Korean central bank kept its benchmark 7-day repurchase rate unchanged at 2.5% due to concerns over the country's economic outlook. 

The dollar index was slightly down Thursday. The index, which measures the strength of the greenback against a basket of six major currencies, was 97.34 at 0816 IST, down from 97.47 on Wednesday and 97.51 Tuesday. Data from the International Monetary Fund showed that the share of dollar as the world's reserve currency fell in Jan-Mar, while that of the euro and the Swiss franc gained. The dollar's share declined to 57.7% at the end of March from 57.8% at the end of December. In the same period, the share of euro rose to 20.1% from 19.8%.

Since Apr. 2, when US President Donald Trump announced reciprocal tariffs on its trading partners, the dollar index is down over 6%. In the latest move, the US said it will impose a 50% tariff on goods imported from Brazil, starting Aug. 1. Trump cited Brazil's "insidious attacks on free elections" and censorship orders on US social media platforms for the levy, along with the "very unfair trade relationship" between the two countries. 

The Indonesian rupiah, the Thai baht, and the Philippines peso rose 0.3% each against the greenback. Meanwhile, the US has announced a 20% tariff on the Philippines, higher than 17% imposed in April. The central bank of Thailand said Wednesday that the nation's economy is expected to slow down in the second half of 2025. 

The Malaysian ringgit rose at a relatively slower pace of 0.1% against the greenback as Malaysia's central bank cut the benchmark interest rate Wednesday, which weighed on its currency. Bank Negara Malaysia slashed its overnight policy rate by 25 basis points to 2.75%, on expected lines. The Taiwan dollar was down 0.3% against the greenback. (Sourabh Kumar)

India Rupee: Expected range for rupee - Jul 10

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

(Sourabh Kumar and Pratiksha)

End

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

Edited by Akul Nishant Akhoury

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