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Informist, Friday, Jul. 18, 2025

By Gowri Lakshmi

MUMBAI – The rupee ended close to a four-week low against the dollar Friday as banks continuously purchased the greenback on behalf of importers and foreign portfolio investors, dealers said. However, dollar sales by exporters gave the rupee a cushion, dealers said. "The market is in panic before the weekend, you don't know what is going to happpen," a dealer at a private-sector bank said. A few dealers also speculated that the Reserve Bank of India also sold dollars, which limited the rupee's fall.

After moving in a relatively wide range of over 25 paise during the day, the rupee settled at 86.1475 against the greenback, down from its previous close of 86.0750. On week, the rupee depreciated 0.4% against the greenback.

A rise in other Asian currencies supported the rupee, dealers said. Most other Asian currencies rose against the dollar as the dollar index declined. Other Asian currencies rose between 0.1% and 0.4%, with the Thai baht being the biggest gainer.

The rupee started the day higher against the dollar at 86.0125 as the dollar index fell even after better-than-expected jobs data and retail sales data in the US, dealers said.

US retail sales rose 0.6% on month in June, higher than analysts' forecast of 0.5%. The initial jobless claims data for the week ended Saturday also declined, indicating a solid US labour market. The intial jobless claims data showed the number of Americans filing for unemployment benefits fell 7,000 to a seasonally adjusted 221,000, much lower than the forecast of 235,000 claims in a Reuters poll. At 1530 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 98.41, broadly steady from 98.62 Thursday and 98.28 Wednesday. The index fell to a low of 98.32 earlier in the day.

However, shortly after the market opened, the rupee came under pressure as importers, especially oil marketing companies, purchased dollars, fearing the rupee would fall sharply, dealers said. Banks also bought dollars on behalf of overseas investors who withdrew funds from the domestic capital markets, especially the equity market, as the delay in the India-US trade deal made them jittery, dealers said.

"The rupee fell as FPIs exited the country, frustrated with no deal till date despite the constant assurances from Trump that a deal is on the cards," Anil Kumar Bhansali, head of treasury and executive director at Finrex Treasury Advisors, said in a note.

Both the benchmark stock indices, the Nifty 50 and the BSE Sensex, closed 0.6% lower Friday. "Investors are now a little confused, the delay in the US trade deal is hinting at a not-so-favourable deal for us," said another currency trader at a broking firm.

Demand for dollars from importers and for persistent FPI outflows likely triggered stop-losses on short dollar bets at 86.10 a dollar level and pushed the rupee to a low of 86.2325 against the greenback, its lowest level since Jun. 24.

The rupee fell through the key support levels of 86.10, 86.15, and 86.20 against the dollar during the day. Noting the sharp fall of the rupee, exporters rushed to purchase the greenback at 86.16, which prevented a steeper fall, dealers said. Dealers remained mixed on whether the RBI was actively intervening in the market. While some said the RBI was likely selling dollars throughout the day, especially at 86.20 a dollar and below, others said the RBI was not very active.

FORWARDS

Dollar/rupee forward premiums rose as the Reserve Bank of India drained INR 2.00 trillion from the banking system through its seven-day variable rate reverse repo auction, dealers said. However, dollar sales by exporters for forward delivery limited the rise in forward premiums, dealers said.

At 1530 IST, the one-month exact period dollar/rupee forward premium was at 10.16 paise, up from 9.60 paise Thursday and 9.52 paise Wednesday. On an annualised basis, it was 1.39%, up from 1.31% Thursday and 1.30% Wednesday. The yield on the 10-year benchmark US Treasury note was little changed Friday despite upbeat US retail sales for June and fall in weekly jobless claims. Forwards of a currency pair are reflective of the interest rate differential between two countries.

Market participants see strong technical support for the one-year dollar/rupee forward premium at 1.90-2.00%. The one-year exact period dollar/rupee forward premium ended at 1.97%, against 1.96% Thursday. On an absolute basis, the premium was 169.84 paise, against 168.82 paise Thursday.

OUTLOOK

Markets are shut Saturday. Monday, the rupee will take cues from the movement in the dollar index and crude oil prices, dealers said. Market participants will be on the lookout for news on tariffs and an India-US trade deal, they said. Dealers expect the rupee to remain under pressure as FPIs are likely to continue to exit the Indian financial markets amid lack of at least an interim India-US trade deal and heightened uncertainty about US tariff policies. 

Dealers also expect importers to purchase dollars for fear of a further fall in the rupee. However, should the rupee fall sharply or near the crucial support level of 86.25 a dollar, dealers expect the RBI to step in with dollar sales to limit the fall and curb market volatility. Exporters may also step in with dollar sales to take advantage of the higher dollar/rupee levels, they said. This may provide further cushion for the domestic currency.

Monday, the rupee is seen moving in a range of 85.90-86.30 against the greenback. Dealers peg key technical support for the Indian unit at 86.25 a dollar.

India Rupee - World FX: Yen flat before upper house elections; dollar index down

NEW DELHI – The yen was flat against the dollar ahead of the upper house election on Sunday, in which Japan's Liberal Democratic Party ruling coalition government is at the risk of losing its majority. Latest media polls have shown chances of the ruling coalition losing majority in the house, increasing the risk of political instability at a time when the country is struggling to clinch a trade deal with the US and stoking fears of a rise in debt.

Meanwhile, data released earlier in the day showed the country's core inflation slowed last month but stayed above the central bank's 2% target for well over three years, reinforcing market expectations of further interest rate hikes. 

The dollar index edged lower even after data on Thursday showed a higher-than-expected retail sales in June and a fall in jobless claims for the last week. US retail sales increased 0.6% last month after an unrevised 0.9% drop in May. Economists polled by Reuters had forecast retail sales would gain 0.1%.

The initial jobless claims data showed that the number of Americans filing for unemployment benefits dropped by 7,000 to a seasonally adjusted 221,000 for the week ended July 12, the lowest level since April. Analysts forecasted 235,000 claims in a Reuters poll.

However, the dollar index, which measures the strength of the dollar against a basket of six major currencies, gained over 0.5% this week as a slew of recent solid economic data supported the view that the Federal Reserve can delay interest rate cuts further. At 1610 IST, the dollar index was at 98.36, against 98.62 Thursday and 98.28 Wednesday. 

Tracking the fall in the dollar index, the euro and pound sterling gained 0.4% and 0.2% against the greenback, respectively. Both the Australian dollar and the New Zealand dollar also rose over 0.5% due to a fall in the dollar index.  (Pratiksha)

India Rupee: Forward premiums rise as RBI drains INR 2-tln liquidity via VRRR

MUMBAI – Dollar/rupee forward premiums rose as the Reserve Bank of India drained out INR 2 trillion from the banking system through its seven-day variable rate reverse repo auction, dealers said. However, dollar sales by exporters for forward delivery limited the rise in forward premiums, dealers said.

"The levels are up because of the INR 2-trillion VRRR. But since spot (dollar/rupee) is up, nothing much changes as exporters are receiving," a currency trader at a brokerage firm said. A sharp fall in the rupee prompted exporters to sell dollars for forward delivery, dealers said. In the domestic spot market, the rupee fell to an over three-week low of 86.2325 a dollar earlier in the day due to persistent dollar demand from importers and foreign portfolio investors, dealers said. 

At 1343 IST, the one-month exact period dollar/rupee forwards premium was at 10.09 paise, up from 9.60 paise Thursday and 9.52 paise from Wednesday. On an annualised basis, it was 1.38%, up from 1.31% Thursday and 1.30% Wednesday.

Yield on the benchmark 10-year US Treasury note was little changed Friday despite upbeat US retail sales for June and fall in weekly jobless claims. Forwards of a currency pair are reflective of the interest rate differential between two countries. Data released on Thursday showed retail sales in the US rose 0.6% on month in June, beating the analyst expectations of a 0.5% rise. The initial jobless claims for the week ended Saturday fell 7,000 to a seasonally adjusted 231,000. Economists polled by Reuters had forecast claims at 235,000.

Market participants see strong technical support for the one-year dollar/rupee forward premium at 1.90-2.00%. At 1343 IST, the one-year exact period dollar/rupee forward premium was 1.97%, against 1.96% Thursday. On an absolute basis, the premium was 169.84 paise, against 168.82 paise Thursday.  (Gowri Lakshmi)

India Rupee: Off lows; remains down on dollar purchases by importers, FPIs

MUMBAI – The rupee was off lows but remained down against the dollar as banks persistently purchased dollars on behalf of oil marketing companies and foreign portfolio investors, dealers said. The rupee fell to an over-three-week low of 86.2325 owing to continuous dollar demand. However, some dollar sales by exporters limited the fall of the rupee, dealers said. 

"I think stop-losses were triggered at 10 (86.10), and then at 16 (86.16) a few exporters came in. Today was a game over for rupee, the rupee broke all crucial levels," a dealer at a private-sector bank said. The rupee broke the key support levels of 86.10, 86.15 and 86.20 against the dollar earlier in the day. 

Oil marketing companies and other importers purchased dollars fearing a further fall of the Indian currency, dealers said. Market participants were worried as there was still no clarity or news on the India-US trade deal and amid heightened uncertainty about the US tariff policies, dealers said. However, noting the sharp fall of the rupee, a few exporters sold the greenback, which provided some cushion for the Indian unit, dealers said. Some dealers also speculated that the Reserve Bank of India also sold dollars to prevent a further fall of the rupee. 

The rupee also came under pressure as overseas investors withdrew funds from domestic financial markets, especially the Indian equity market, and moved to other safe-haven assets as global markets remain rattled about US tariffs. At 1338 IST, domestic benchmark stock indices -- the Nifty 50 and the BSE Sensex – were down 0.6% and 0.7%, respectively. 

For the rest of the day, the rupee is seen moving in a range of 86.00-86.25 against the greenback. Dealers peg key technical support for the rupee at 86.25 a dollar.  (Gowri Lakshmi)

India Rupee: Technical levels for rupee - Jul 18

MUMBAI – At 1109 IST, the rupee was at 86.2100 per dollar. At 0900 IST, the rupee was at 85.0125 a dollar, against the previous close of 86.0750. Following are the key support and resistance levels for the rupee as provided by leading banks and brokerages:

(Gowri Lakshmi and Pratiksha)

India Rupee: Steady as oil cos' dollar buys offset fall in dollar index

MUMBAI – The rupee was steady against the dollar Friday as banks purchased dollars on behalf of oil marketing companies and other importers, which offset the impact of the fall in dollar index, dealers said. "We expected rupee to open much higher, but oilers have come in the outset, it opened only nearly 10 paise up," a dealer at a private sector bank said.

The rupee came under pressure as oil marketing companies purchased dollars, fearing a sharp fall in the rupee, dealers said. At 0943 IST, the Brent Crude contract on the Intercontinental Exchange was at $69.46 per barrel, against $69.52 per barrel Thursday and $68.52 per barrel Wednesday.

However, a fall in dollar index helped ease some pressure on the rupee, dealers said. The dollar index fell as investors moved to other alternative safe haven currencies including the Swiss franc and the Japanese yen. The greenback fell despite better-than-expected US retail sales data for June and weekly jobless claims data. 

Data published Thursday showed that the retail sales data for June rose 0.6% on month, slightly higher than the analyst forecast of 0.5% growth. The initial jobless claims for the week ended Saturday also declined, hinting at a solid US labour market. The data showed that the number of Americans filing for new unemployment benefits fell 7,000 to seasonally adjusted 221,000, against a 235,000 claims as forecast by analysts in a Reuters poll. 

At 0947 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 98.50, broadly steady from 98.62 Thursday and 98.28 Wednesday. The index fell to a low of 98.39 in earlier in the day. 

Dealers expect the rupee to remain under pressure for the rest of the day owing to continuous dollar demand from importers. During the day, the rupee is seen moving in a range of 86.00-86.25 against the greenback. Dealers peg key technical support for the rupee at 86.20 a dollar.  (Gowri Lakshmi)

India Rupee: Expected range for rupee - Jul 18

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)

India Rupee - Asia FX: Most up; dollar tad down despite strong US econ data

MUMBAI – Most Asian currencies were up against the dollar Friday as the dollar index fell slightly despite upbeat US retail sales data for June and jobless claims declining. US retail sales rose 0.6% from May to $720.1 billion last month, beating analyst forecasts of 0.5% rise. The initial jobless claims data for the week ended Saturday showed that the number of Americans filing new applications for unemployment benefits fell, hinting at a stable US labour market. The initial claims for jobless benefits dropped by 7,000 to a seasonally adjusted 221,000, much lower than the forecast of 235,000 claims in a Reuters poll.

At 0727 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 98.46, a tad down from 98.62 Thursday and 98.28 Wednesday. The offshore Chinese yuan was up 0.1% against the greenback.

The Taiwan dollar was up 0.2% against the greenback and the South Korean won was up 0.1%. The Malaysian ringgit too rose 0.1% against the US unit. The Thai baht was up 0.1% against the greenback. Thailand is now set to offer US zero tariffs on 90% of US goods, from 60% planned earlier, in an attempt to avert the reciprocal tariffs. This proposal from Thailand is likely to eliminate tariffs and non-tariff barriers on about 10,000 US products, Vice Chairman of the Thai Chamber of Commerce Chanintr Chalisarapong said Thursday in an interview with Bloomberg News. 

Bucking the trend, the Indonesian rupiah was down 0.3% against the greenback. Jakarta says it has reached a trade deal with Washington after an "extraordinary struggle" in negotiations which brought the tariffs down to 19% from 32%. "This is an extraordinary struggle by our negotiating team led by the Coordinating Minister for Economic Affairs," the President's Spokesperson Hasan Nabi said Wednesday.  (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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