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Informist, Tuesday, Jul. 15, 2025

By Gowri Lakshmi

MUMBAI – The rupee ended sharply up against the dollar Tuesday as banks persistently sold the greenback for foreign fund inflows into public offerings of domestic companies, dealers said. However, dollar purchases by some banks for importers and the dollar index hovering near a three-week high limited the rise of the rupee, dealers said.

After moving in a range of 22 paise during the day, the Indian currency ended at 85.8100 a dollar, sharply up from its previous close of 85.9850. The domestic currency appreciated 0.2% against the greenback. Other Asian currencies were mixed against the greenback as market participants awaited US inflation data due later in the day. The Malaysian ringgit was the biggest gainer, rising 0.3% against the US unit.

The rupee opened broadly steady at 85.9700 a dollar, after trading at around 86 a dollar in the offshore non-deliverable forwards market, as banks' dollar sales, likely for the Reserve Bank of India, offset the impact of the rise in the dollar index, dealers said. The central bank sold the greenback in the offshore non-deliverable forwards market at 86.00 a dollar to prevent the rupee slumping below the psychologically crucial level.

"RBI hit the markets before the spot (market opened) to save it from falling freely past 86.15 today," a dealer at a private-sector bank said. "Since US inflation is due later, it would may push the rupee lower so they had to come for saving."

As soon as the market opened, the rupee began appreciating as banks sold the greenback for foreign fund inflows, likely into the initial public offerings of domestic companies, dealers said. Public offerings of Mirc Electronics Ltd., Exicom Tele-Systems Ltd., Astec Lifesciences Ltd., and Skyline India Ltd. are currently open for subscription. At 1530 IST, the benchmark stock indices, the Nifty 50 and the BSE Sensex, were up 0.5% and 0.4%, respectively.

Dealers also attributed the rise in the rupee to flows into the Indian financial markets as market participants remained sanguine about an India-US trade deal, dealers said. Commerce Minister Piyush Goyal Monday said talks with the US on a bilateral trade agreement are advancing at a fast pace with the two sides focusing on a mutually beneficial pact. 

Some of the inflows were also likely related to the qualified institutional placement of State Bank of India, dealers said. In May, the bank received approval from its board to raise equity capital of up to INR 250.00 billion in one or more tranches during the financial year 2025-26 (Apr-Mar) through QIP. As per media reports, State Bank of India is likely to launch its QIP this week.

A currency trader at a broking firm said roughly over $500 million-$750 million were received as foreign funds into the QIP Tuesday. Dealers expect more funds to be absorbed by the market and the rupee to strengthen as the funds raised through the QIP will be in tranches.

The rupee rose to a high of 85.7500 a dollar due to the flows. However, noting the unexpected rise of the rupee, importers rushed to purchase the greenback and take advantage of the relatively lower dollar/rupee levels, dealers said. This capped the rise of the rupee, they said. "Importers swarmed in when the rupee rose above 80 (85.80)," the dealer quoted earlier said.

Strength in the dollar index also limited the rise of the rupee, dealers said. The dollar index hit a near-three-week high Monday and extended its gains ahead of US inflation data for June later in the day. Headline inflation in the US is expected to increase to 2.7% on an annual basis in June, up from 2.4% in May. Core inflation is expected to rise to 3.0% from 2.8%, according to a poll by Reuters. 

At 1530 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 97.99, broadly steady from 98.10 Monday and 97.87 Friday. The index had hit a high of 98.14 Monday, its highest level since Jun. 25.

FORWARDS

The one-year exact period dollar/rupee forward premium was little changed Tuesday as market participants refrained from placing large bets ahead of the release of US inflation numbers later in the day, dealers said.

The yield on the 10-year benchmark US Treasury note was unchanged Monday at close to a one-month high of 4.43% as investors weighed the prospects of an early exit of US Federal Reserve Chair Jerome Powell, with US President Donald Trump and his administration exerting pressure on the central bank and its officials to lower their benchmark lending rates. Forwards of a currency pair are reflective of the interest rate differential between the two countries.

At 1530 IST, the one-year exact period dollar/rupee forward premium was 169.64, against 169.13 Monday and little changed from 169.47 Friday. On an annualised basis, it was at 1.98%, little changed from 1.97% Monday and Friday.

OUTLOOK

On Wednesday, the rupee will take cues from the movement in the dollar index and crude oil prices, dealers said. "I think the dollar will strengthen after the CPI data. The rupee can open as low as 86.20 (a dollar)," a dealer at a private-sector bank said.

Dealers expect banks to sell dollars for foreign fund inflows into domestic financial markets, dealers said. They also expect importers to purchase dollars to take advantage of the dollar/rupee levels if the Indian currency sustains its gains. However, this may cap the rupee's rise. Any tariff-related news will also be closely watched by investors. Any harsher-than-expected tariff news from Trump may trigger foreign fund outflows, dealers said.

During the day, the rupee is seen moving in a range of 85.70-86.25 against the greenback. Dealers peg key technical resistance for the rupee at 85.10 a dollar. 

India Rupee - World FX: Australian dollar up on improved consumer sentiment data

MUMBAI – The Australian dollar rose 0.3% against the greenback Tuesday after Australia's consumer sentiment improved. The Westpac Consumer Sentiment Index climbed 0.6% on month to 93.1 in July even as household optimism was dampened by the Reserve Bank of Australia's unexpected decision to hold interest rates at its July meeting. The New Zealand dollar was also up 0.4%, tracking the gains of the Australian currency.

The currencies of both Australia and New Zealand were also supported by China's upbeat GDP data. China's GDP expanded 5.2% in the three months to June, growing 1.1% on quarter. Market participants had expected the GDP to grow 0.9% on quarter. Any change in the Chinese economy has a direct impact on the currencies of Australia and New Zealand because of their close trade relations.

The euro was up 0.2% against the US unit after the ZEW Indicator of Economic Sentiment rose to 36.10 points in July from 35.30 in June. The economic sentiment for Germany, the euro bloc's largest economy, also increased to 52.70 points in July from 47.50 points in June.

The US dollar hovered near the multi-week low it hit Monday, ahead of the US CPI for June due later in the day. Headline inflation in the US is expected to rise to 2.7% on an annual basis, up from 2.4% in May. Core inflation is expected to rise to 3.0% from 2.8%, according to a poll by Reuters.

At 1516 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 98.10 Monday and 97.87 Friday. The index had hit a high of 98.14 Monday, its highest level since Jun. 25. The Japanese yen was up 0.1% and the Swiss franc was up 0.3%. 

The pound sterling was up 0.2% ahead of the UK's Finance Minister Rachel Reeves's annual Mansion House speech due later in the evening. Market participants will closely assess her speech, which will be crucial to understand how she aims to revive the UK's economy. The Canadian dollar was up 0.1% against the greenback ahead of Canada's inflation print for June due later in the day.  (Gowri Lakshmi)

India Rupee: Forward premiums steady before US CPI; India-US trade deal eyed

MUMBAI - The one-year exact period dollar/rupee forwards premium was little changed Tuesday as market participants refrained from placing large bets ahead of the release of US inflation numbers, due later in the day, dealers said. Market participants also await for more clarity on the India-US trade deal, dealers said. 

"Nothing much has been happening in forwards market since 2-3 days, everyone is just waiting for the finalisation of the India-US trade deal," a currency trader at a brokerage firm said. 

New Delhi is in conversation with Washington on a bilateral trade agreement and it is advancing at a fast pace with both the countries focusing on a mutually beneficial pact, Commerce Minister Piyush Goyal said Monday. Market participants hope for at least an interim trade deal before the US's country-wise reciprocal tariffs kick in from Aug. 1. 

The yield on the benchmark 10-year US Treasury note was unchanged Monday at nearly a one-month high of 4.43%, as investors weighed the prospects of an early exit of US Federal Reserve Chair Jerome Powell, as US President Donald Trump and his administration pressurise the central bank and its officials in lowering their benchmark lending rates. Forwards of a currency pair is the interest rate differential between the two countries.

Market participants now eye the US consumer price index for June due later in the day, dealers said. Headline inflation in the US is expected to increase to 2.7% on an annual basis in June, up from 2.4% the prior month. Core inflation is expected to rise to 3.0% from 2.8%, according to a poll by Reuters. 

At 1432 IST, the one-year exact period dollar/rupee forward premium was 169.39, against 169.13 Monday and down from 169.47 Friday. On annualised basis, it was at 1.97%, unchanged from Monday and Friday.  (Gowri Lakshmi)

India Rupee: Sharply up on likely foreign fund flows; strong dollar index weighs

MUMBAI – The rupee was sharply up against the dollar as banks persistently sold the greenback for likely foreign fund inflows, dealers said. However, dollar purchases by importers and a slight strengthening of the dollar index capped the rise of the rupee, dealers said.

"The IPO (initial public offerings) are pretty small, it won't stir the nest but since market participants aren't betting much, the rupee is free flowing," a dealer at a private sector bank said. Public offerings of MIRC Electronics Ltd., Exicom Tele-Systems Ltd., Astec Lifesciences Ltd., and Skyline India Ltd. are currently open for subscription.

Some importers bought dollars when the rupee rose above 85.80 a dollar, as they wanted to take advantage of the relatively lower dollar/rupee levels, dealers said.

The dollar index hovered around its multi-week high ahead of US consumer inflation data later in the day. At 1311 IST, the dollar index, which measures the strength of the greenback against a basket of six major currencies, was at 98.00, broadly steady from 98.10 Monday and 97.87 Friday. The index had Monday hit a high of 98.14, its highest level since Jun. 25.

Market participants are also monitoring any developments on India-US trade deal, dealers said. Speaking on the sidelines of an event in New Delhi, Commerce Minister Piyush Goyal said talks with the US on a bilateral trade agreement are advancing at a fast pace with the two sides focusing on a mutually beneficial pact.

For the rest of the day, the rupee is seen moving in a range of 85.70 and 86.00 a dollar. Dealers peg key technical resistance for the Indian unit at 85.70 a dollar.  (Gowri Lakshmi)

India Rupee: Technical levels for rupee - Jul 15

MUMBAI – At 1117 IST, the rupee was at 85.8550 per dollar. At 0900 IST, the rupee was at 85.9700 a dollar, against the previous close of 85.9850. 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 down as dollar rises ahead of US inflation data

MUMBAI – Most Asian currencies were lower against the dollar Tuesday as the dollar index hovered around its multi-week high hit Monday. Market participants are waiting for US retail inflation data for June due later in the day. Headline inflation in the US is expected to increase to 2.7% on an annual basis in June, up from 2.4% the prior month. Core inflation is expected to rise to 3.0% from 2.8%, according to a poll by Reuters. 

At 1008 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 98.03, broadly steady from 98.10 Monday and 97.87 Friday. The index had hit a high of 98.14 Monday, its highest level since Jun. 25. Amongst Asian currencies, the Indonesian rupiah was the worst hit. It was down 0.3%.

The Taiwan dollar was down 0.1% and the Philippine peso was down 0.2% against the greenback. Thai baht, Malaysian ringgit, the offshore Chinese yuan, and the South Korean won all traded flat against the dollar. China's GDP data for the June quarter took the market by surprise. The Chinese economy expanded 5.2% in Apr-Jun, growing 1.1% on quarter and beating the market forecast of a 0.9% rise.

A South Korean diplomat Monday said Seoul is committed to accelerating trade talks with the US over the next two weeks, for a deal that would be mutually beneficial. "We intend to accelerate substantive discussions over the next two weeks with the deadline extended (to) Aug. 1 to identify a viable landing zone between (South Korea) and the United States with the aim of reaching a mutually beneficial agreement that balances and expands our bilateral trade rather than constraining it," Ahn Se-ryeong, economic minister at the South Korean Embassy in Washington, said.  (Gowri Lakshmi)

India Rupee: Rises on FX inflows; RBI's dlr sales in NDF prevent fall to 86/$

MUMBAI – The rupee rose against the dollar Tuesday as banks sold the greenback for foreign fund inflows, dealers said. However, a strong dollar index, ahead of the US inflation data, due later in the day, weighed on the Indian unit, they said.

"Some small IPOs (initial public offerings) are there, some flows are likely into it and some flows on optimism around India-US trade deal as well," a currency trader at a brokerage firm said. Public offerings of Mirc Electronics Ltd., Exicom Tele-Systems Ltd., Astec Lifesciences Ltd., and Skyline India Ltd. are currently open for subscription.

A few dealers said that public sector banks also sold dollars, likely on behalf of the Reserve Bank of India in the offshore non-deliverable forwards market, which prevented the rupee from breaching the psychologically crucial level of 86-per-dollar mark at the opening. 

Dealers said the rupee may strengthen as flows around INR 250 billion are expected into the qualified institutional placement or follow-on public offer for State Bank of India. In May, the bank received approval from its board to raise equity capital of up to INR 250 billion in one or more tranches during 2025-26 (Apr-Mar) through QIP. As per media reports, the largest public sector bank of India may launch its QIP this week. 

A strong dollar index, however, continued to weigh on the rupee, dealers said. The index hovered around its three-week high hit on Monday. Market participants now await the US inflation data. Headline inflation in the US is expected to increase to 2.7% on an annual basis in June, up from 2.4% the prior month. Core inflation is expected to rise to 3.0% from 2.8% in May, according to a poll by Reuters. 

At 0957 IST, the dollar index, which measures the strength of the greenback against a basket of six major currencies, was at 98.04, broadly steady from 98.10 Monday and 97.87 Friday. The index had hit a high of 98.14 Monday, its highest level since Jun. 25. 

For the rest of the day, the rupee is seen moving in a range of 85.80 and 86.05 a dollar. Dealers peg key technical resistance for the Indian unit at 85.80 a dollar.  (Gowri Lakshmi)

India Rupee: Expected range for rupee - Jul 15

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: 

(Gowri Lakshmi)

End

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

Edited by Rajeev Pai

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