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Informist, Tuesday, Jul. 22, 2025

By Gowri Lakshmi

MUMBAI – The rupee ended near a one-month low against the dollar Tuesday on continuous dollar demand from foreign portfolio investors and importers, dealers said. Some dollar sales by exporters, however, prevented the rupee from falling further, dealers said. Dealers said despite the fall in the rupee, volatility in the market was limited and intervention from the Reserve Bank of India was absent. 

"India-US not getting a deal was a news which investors reacted to, which was being evident from the delay (in the deal)," a dealer at a private sector bank said. "Some outflows also happened from the corporate side. Exporters were there but not aggressive, they are obviously waiting for more fall." 

After hitting a low of 86.4125 a dollar, the rupee settled at 86.3675 a dollar. The Indian unit moved in a range of nearly nearly 20 paise during the day. The rupee closed at 86.2925 on Monday. 

Other Asian currencies moved on a mixed note as investors awaited details on US trade deals with its trading partners. The South Korean won was the biggest gainer and the Philippines' peso was the worst hit in the region. 

The rupee started the day slightly higher against the dollar as the dollar index declined amid rising worries over US tariff policies ahead of the Aug. 1 deadline. 

US Treasury Secretary Scott Bessent Monday said the US administration is more concerned with the quality of the trade agreements rather than their timing. Investors also weighed the ongoing friction between the US and the European Union despite the ongoing trade negotiations between the US and the euro bloc. The EU is exploring a broader range of possible counter-measures against the US as the likelihood of an acceptable trade agreement with Washington fades. 

At 1530 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 97.78, compared to 97.85 Monday and down from 98.46 Friday.

The rupee came under pressure as importers began purchasing dollars, fearing a further fall in the rupee, dealers said. "The spot (market) is definitely only going to go down (implying a fall in rupee) so most importers panicked in the morning," said another dealer at a private sector bank. The rupee was further pressured as banks purchased dollars ahead of the daily reference-rate fixing window, dealers said. 

The rupee breached the key level of 86.4125 a dollar, its lowest level since Jun. 23, as banks purchased dollars on behalf of foreign portfolio investors, who withdrew funds from domestic financial markets after reports that a trade between India and the US was unlikely before the tariffs came into effect on Aug. 1, CNBC TV-18 reported earlier in the day, citing sources.

A few public sector banks also purchased dollars to cover their short dollar bets, due to lack of developments related to the US-India trade deal. The rupee was also weighed down by corporate outflows, likely relating to the State Bank of India's qualified institutional placement, which began last week. The bank's QIP worth INR 250.00 billion opened Wednesday. According to some dealers, some dollar purchases were also related to acquisition of Amsterdam-based Akzo Nobel India by JSW Paints. JSW Paints is acquiring stakes in the Dutch company for up to $1.04 billion. 

However, as soon as the rupee inched to the key level of 86.40 a dollar, a few exporters sold the greenback to take advantage of the relatively higher/dollar rupee levels, dealers said. This prevented the rupee from falling further, dealers said. 

FORWARDS 

The one-year dollar/rupee forward premium rose to a near three-week high Tuesday, tracking a fall in the yield on the benchmark 10-year US Treasury note, dealers said. However, the rise in forward premium was capped as some banks sold dollars for forward delivery on behalf of exporters, they said. 

The yield on the benchmark 10-year US Treasury note fell to an over two-week low as investors assessed the health of the US economy amid rising worries related to the US tariffs, with the Aug. 1 deadline looming large. On Monday, the Conference Board reported that its Leading Economic Index dropped 0.3% in June to 98.8, more than the 0.2% fall forecast by Dow Jones. The US Treasury yield eased to 4.38% Monday, its lowest level since Jul. 7, from 4.40% Friday. 

Meanwhile, exporters stepped in to sell dollars for forward delivery to take advantage of the relatively higher dollar/rupee forward premium levels, dealers said. However, exporters' forward dollar sales were not aggressive in nature, they said. The one-year dollar/rupee forward premium rose to 2.03% earlier in the day, its highest level since Jul. 4. 

A fall in liquidity in the banking system pushed near-term dollar/rupee forward premiums higher, dealers said. The RBI Monday net absorbed INR 2.40 trillion of liquidity, compared to INR 3.04 trillion Sunday. 

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 2.02%, up from 1.99% Monday and 1.97% Friday. On an absolute basis, the premium was at 174.18 paise, against 172.36 paise Monday and 169.84 paise Friday. 

OUTLOOK 

On Wednesday, the rupee will take cues from the movement in dollar index and crude oil prices, dealers said. The rupee is likely to come under pressure as banks may purchase dollars on behalf of overseas investors and importers, dealers said. Market participants will also look out for any tariff-related news and US Federal Reserve Chairman Jerome Powell's speech later in the day. 

Should the rupee come under immense pressure and inch toward the crucial support level of 86.50 a dollar, dealers expect the RBI to step in with dollar sales to prevent any sharp fall in the rupee. Dealers also expect exporters to sell dollars at 86.45 and above levels, which may support the rupee. During the day, the rupee is seen moving in a range of 86.20 to 86.60 a dollar. Dealers see key technical support for the rupee at 86.50 a dollar. 

India Rupee - World FX: Dlr steady as mkt awaits more clarity on US tariffs

MUMBAI – The dollar index remained steady as market participants await more details about US tariffs. They are anticipating more trade deals between the US and its major trading partners as the tariff deadline of Aug. 1 approaches. The dollar index, which measures the strength of the greenback against a basket of six major currencies, was 97.88 at 1413 IST, against Monday's 97.85 and Friday's 98.46. 

The Conference Board's Leading Economic Index for the US fell 0.3% on month to 98.8 in June. It fell more than the Dow Jones forecast of a 0.2% fall. Further, US Treasury Secretary Scott Bessent, attacking the Federal Reserve, said the institution's independence on monetary policy was under threat by its "mandate creep" into non-policy areas. He called on the Federal Reserve to undertake a review of such operations.

The yen, after rising in early trade, was down 0.2% against the greenback. Market participants remained unfazed by the outcome of Japan's Upper House elections over the weekend, in which the ruling party lost its majority. Japanese Prime Minister Shigeru Ishiba however pledged to stay as the nation's leader despite the defeat. The result came when Japan was in the middle of trade deal negotiations with the US ahead of the Aug. 1 tariff deadline.

The euro was steady against the dollar. Market participants await a trade deal between Europe and the US, while being cautious of the same, as reports suggested that multiple European Union member countries are considering retaliatory measures targetting US services. The pound sterling was down 0.1% against the greenback. 

The Australian dollar and the Canadian dollar fell 0.3% and 0.1% against the greenback, respectively. The Swiss franc rose 0.1% against the US currency. Market participants now await the release of the US Johnson Redbook retail sales index data, due later in the day.  (Sourabh Kumar)

India Rupee: Falls to near-1-mo low on FX outflows, importers' dollar buys

MUMBAI – The rupee fell to a near-one-month low of 86.3950 a dollar Tuesday as banks persistently purchased the greenback on behalf of importers, dealers said. A few banks also purchased dollars likely for foreign fund outflows, dealers said. "Importers are the ones primarily there, some outflow is seen now, we can expect 40 (86.40) to breach today," a dealer at a private-sector bank said. 

The rupee came under pressure as importers purchased greenback, fearing a sharp fall of the rupee, dealers said. According to some dealers, investor sentiment was also hit, likely triggering a foreign fund outflows, after reports that an interim trade between India and the US is unlikely before the Aug. 1 deadlines, CNBC-TV18 reported Tuesday citing sources. The rupee also came under pressure as banks purchased dollars during the daily reference-rate fixing window, according to some dealers. 

However, noting the fall of the rupee, some banks sold dollars on behalf of exporters, which prevented the rupee from breaching the crucial support level of 86.40 a dollar, dealers said. They said despite the fall of the rupee, exporters were not aggressive in nature.

A slight fall in the dollar index due to a rise in the Japanese yen, also eased pressure on the rupee, dealers said. At 1343 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 97.95, broadly steady from 97.85 Monday and down from 98.46 Friday. The index fell to a low of 97.70 Monday. 

For the rest of the day, the rupee is seen moving in a range of 86.20 to 86.50 against the greenback. Dealers peg key technical support for the Indian unit at 86.50 a dollar.  (Gowri Lakshmi)

India Rupee: Technical levels for rupee - Jul 22

MUMBAI – At 1110 IST, the rupee was at 86.2650 per dollar. At 0900 IST, the rupee was at 86.2450 a dollar, against the previous close of 86.2925. Following are the key support and resistance levels for the rupee as provided by leading banks and brokerages:

(Gowri Lakshmi)

India Rupee: Tad up on fall in dollar index; importers' dollar buys weigh

MUMBAI – The rupee was slightly higher against the dollar Tuesday as the dollar index fell as investors remained worried about US tariff uncertainties, dealers said. However, dollar demand from some importers weighed on the rupee, capping the rise of the Indian unit, dealers said.

The dollar index extended its losses from Monday as investors' risk-off sentiment was hit as they awaited further details on the ongoing trade deal talks between the US and its trading partners ahead of the Aug. 1 deadline. US Treasury Secretary Scott Bessent Monday said the US administration was more concerned with the quality of the trade agreements rather than their timing. 

At 0943 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 97.92, broadly steady from 97.85 Monday and down from 98.46 Friday. The index fell to a low of 97.70 Monday. 

However, the rupee was weighed down by banks' dollar purchases on behalf of importers, who feared a sharp fall in the rupee during the day, dealers said. "Importers' panic button has been pressed. They are buying before it further goes to 40 or even 50 (86.40-86.50 a dollar)," a dealer at a private-sector bank said. 

During the day, the rupee is seen moving in a range of 86.15 to 86.40 against the greenback. Dealers peg key technical support for the Indian unit at 86.40 a dollar.  (Gowri Lakshmi)

India Rupee: Expected range for rupee - Jul 22

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)

India Rupee - Asia FX: Most down on uncertainty over US trade deals

MUMBAI – Most Asian currencies were down against the dollar Tuesday due to uncertainty over US tariffs and trade deal talks with its trading partners. With only over a week left for the reciprocal tariffs to come into effect, US Treasury Secretary Scott Bessent Monday said the US administration is more concerned with the quality of the trade agreements rather than their timing. 

At 0738 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 97.92, broadly steady from 97.85 Monday but marginally down from 98.46 Friday. The offshore Chinese yuan was flat and the Thai baht down 0.2%.

The South Korean won fell 0.3% against the dollar. South Korea's National Security Advisor Win Sung-lac is visiting Washington as Seoul accelerates efforts to avert the 25% tariffs imposed ahead of the Aug. 1 deadline. Data released Tuesday showed South Korea's producer inflation rose to 0.5% in June after a four-month slowdown from May's three-year low of 0.3%.

The Indonesian rupiah was down 0.2% against the US unit. Indonesia's Chief Economic Minister Airlangga Hartarto Monday said the 19% tariff on Indonesian goods entering the US may come into effect sooner than Aug. 1.

The Philippines peso rose 0.3% against the greenback as Philippine President Ferdinand Marcos Jr. will meet US President Donald Trump this week to secure a more favourable trade deal before the tariff deadline. "I expect our discussions to focus on security and defense, of course, but also on trade," Marcos said. "We will see how much progress we can make when it comes to the negotiations with the US concerning the changes that we would like to institute to alleviate the effects of a very severe tariff schedule on the Philippines." 

The Malaysian ringgit was up 0.1%. The Taiwan dollar rose 0.2% against the dollar after consumer confidence edged up in July, with households expressing more optimism about the economy and equity markets, even as worries about inflation and potential slowdown in the second half looms. The index gauging Taiwan's economic outlook rose to -28.1 from -30.9 in June. (Gowri Lakshmi)

End

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

Edited by Tanima Banerjee

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