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Informist, Wednesday, Jul. 30, 2025

 

By Gowri Lakshmi

 

MUMBAI – The rupee logged its biggest single-day fall since May 8 and settled at a 5-month low on persistent dollar purchases by foreign portfolio investors, dealers said. Dollar purchases by overseas investors, along with dollar demand from oil marketing companies triggered stop-losses on short dollar bets at multiple levels during the day, dealers said. However, likely dollar sales by exporters and the Reserve Bank of India limited a further slump in the domestic currency, dealers said.

 

"There was continuous dollar demand from FPIs and oilers, probably triggered by sentiment ahead of Trump's tariff deadline," a currency dealer at a brokerage firm said. "RBI was there at several levels but allowed upside (fall in rupee) movement, likely because they want exporters to gain from a weak rupee in lieu of the tariff impact." 

 

After falling 0.7% against the dollar, the rupee settled at 87.4200 a dollar, sharply plunging from 86.8100 a dollar Tuesday. The Indian unit moved in a relatively wider range of 45 paise during the day. The Indian currency was the worst hit amongst its regional peers. 

 

Other Asian currencies also weakened against the greenback due to recent strengthening of the US dollar and as investors brace for the Aug. 1 reciprocal tariffs deadline. Other Asian currencies fell 0.1-0.7%. The South Korean won, however, strengthened against the greenback, in light of rising optimism relating to recent developments in the US-South Korea trade deal. Three top cabinet officials from South Korea met US Commerce Secretary Howard Lutnick in Washington to conclude a trade deal, Seoul said Wednesday.

 

The rupee breached the psychologically crucial level of 87-per-dollar mark in the offshore non-deliverable forwards market and opened at 87.0900 against the dollar as market participants assessed US President Donald Trump's recent hint of tariff rates on India, dealers said. On Tuesday, Trump said India will likely be hit with a 20-25% tariff, little changed from the 26% reciprocal tariff announced in April. 

 

However, he cautioned that the trade deal and the tariff rates have not been finalised as negotiations between New Delhi and Washington are still going on. Media reports on Tuesday said New Delhi is seeking an interim trade deal before the tariffs come into effect. Investor sentiments were rattled as New Delhi failed to secure an interim deal as expected by market players in early July. 

 

"At this point, you don't know what is going to come. The tariff may not be very high but whether it is beneficial or mutually favourable is the question. And the delay in interim deal is making FPIs move out. It has been happening throughout this month," another dealer at a private-sector bank said. The rupee came under immense pressure as banks purchased dollars, likely on behalf of foreign portfolio investors, who withdrew funds from Indian financial markets and moved to other safe-haven assets, dealers said. So far in July, FPIs have withdrawn $1.9 billion worth of investments from domestic markets. 

 

Banks also purchased dollars on behalf of oil marketing companies, who feared a further rise in crude oil prices amid heightened geopolitical tension between the US and Russia, dealers said. Trump Tuesday said he expects Moscow to progress toward a ceasefire with Ukraine "in another 10 days", else Washington will use several measures and issue sanctions against Moscow, which could disrupt the global supply chain. 

 

At 1530 IST, the September Brent crude contract on the Intercontinental Exchange was at $71.75 per barrel, against $72.51 per barrel Tuesday and $70.04 Monday. Crude oil prices hit an over five-week high of $73.17 per barrel earlier in the day.

 

As soon as the rupee hit a low of 87.15 a dollar, some banks sold dollars, likely on behalf of the RBI, to prevent the rupee from slumping further, dealers said. However, the continuous dollar purchases and a relatively mild intervention from the central bank dragged the Indian unit further down and triggered stop-losses on short dollar bets around 87.30 a dollar levels, dealers said. The rupee hit a low of 87.5100 a dollar intraday, its lowest level since Feb. 28.

 

Noting the sharp slump of the Indian currency, banks sold dollars on behalf of exporters, who wanted to take advantage of the relatively higher dollar/rupee levels, dealers said. This prevented the rupee from falling further and helped pare some of the losses incurred during the day, dealers said. 

 

The dollar index remained broadly steady ahead of the policy outcome by the US Federal Open Market Committee, due late in the day, where it is widely expected to hold the Federal Funds rate target range steady at 4.25-4.50%. According to the CME FedWatch tool, traders see a 98% chance of the US Fed maintaining status quo. Investors will assess commentary from Fed Chair Jerome Powell and whether the decision is unanimous.

 

At 1530 IST, the dollar index, which measures the strength of the greenback against a basket of six major currencies, was at 98.95 against 98.90 Tuesday and 98.66 Monday.

 

	AT 1530 IST	AT 0900 IST	HIGH	LOW	PREVIOUS(AT 1530 IST)
Spot rupee per $1	87.4200	87.0900	87.0550	87.5100	86.8150
1-year dlr/rupee fwd (paise)	176.31	177.65	178.92	176.31	176.50

 

FORWARDS

The one-year dollar/rupee forward premium ended steady Wednesday as market participants awaited the outcome of the US FOMC's meeting later in the day, where the central bank is expected to keep the benchmark rate unchanged, dealers said. Forwards of a currency pair are reflective of the interest rate differential between the two countries. 

 

Meanwhile, noting a slump in the rupee in the spot market, some banks bought dollars for forward delivery on behalf of importers as they expect the Indian unit to depreciate further in the near term, supporting the premiums, dealers said. Further, yield on the benchmark 10-year US Treasury note fell ahead of the FOMC decision on Wednesday, slightly supporting the premiums, according to dealers. The 10-year US bond yield fell to 4.34% Tuesday as against 4.42% Monday. 

 

At 1530 IST, the one-year exact period dollar/rupee forward premium was 2.02%, little changed against Tuesday's close of 2.03%. On an absolute basis, the premium was at 176.31 paise, against 176.50 paise Tuesday. 

 

OUTLOOK 

On Thursday, the rupee will takes cues from the movement in the dollar index after the policy outcome of the US FOMC and will track crude oil prices, dealers said. Market participants will continue to closely monitor any developments related to the India-US trade deal. FPIs may continue to buy the greenback to withdraw funds from the Indian markets, which may further weigh on the Indian unit. The National Securities Depository Ltd. issue opened for subscription Wednesday and will close Friday. NSDL has set a price band of INR 760-INR 800 for the public issue.

 

Further, the rupee may continue to find support from foreign fund inflows into the initial public offerings of domestic companies, dealers said. During the day, the rupee is expected to move in a range of 87.20 to 87.70 against the greenback. Dealers peg key technical support for the rupee at 87.60 a dollar.  

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India Rupee - World FX: Dollar index steady ahead of FOMC outcome; yen rises

 

	AT 1615 IST	HIGH	LOW	PREVIOUS
GBP/USD	1.3363	1.3385	1.3343	1.3352
EUR/USD	1.1540	1.1573	1.1532	1.1547
NZD/USD	0.5950	0.5971	0.5946	0.5954
AUD/USD	0.6493	0.6529	0.6491	0.6511
USD/JPY	148.1830	148.5220	147.8030	148.4610
USD/CAD	1.3787	1.3791	1.3760	1.3763
EUR/JPY	170.9970	171.5600	170.8500	171.4500
CHF/USD	1.2406	1.2441	1.2400	1.2400
EUR/CHF	0.9302	0.9309	0.9292	0.9305

 

NEW DELHI – The dollar index was broadly steady Wednesday as traders remained cautious before the Federal Reserve's interest rate decision later in the day. The Federal Open Market Committee is widely expected to leave interest rates unchanged at 4.25-4.50% Wednesday. The FOMC has kept the target range for the federal funds rate at 4.25-4.50% since December.

 

Investors will focus on commentary from Fed Chair Jerome Powell and whether the decision is unanimous. At 1615 IST, the dollar index, which measures the strength of the greenback against a basket of six major currencies, was at 98.95 against 98.90 Tuesday and 98.66 Monday.

 

The Japanese currency traded higher against the dollar, rising for the second day in a row, ahead of the Bank of Japan's policy outcome Thursday. The central bank is widely expected to leave rates unchanged while remaining non-committal to hiking rates amid uncertainty over the economy and government leadership. Meanwhile, a powerful earthquake struck off Russia's Far Eastern Kamchatka Peninsula and generated a tsunami, leading to evacuation warnings along most of Japan's east coast, limiting gains for the Japanese currency. 

 

The euro was down 0.1% against the US unit while the pound sterling was up 0.1% ahead of the Fed policy outcome. Both the Australian dollar and the New Zealand dollar were down 0.3% and 0.1%, respectively, against the dollar. Australia's consumer prices grew at the slowest pace in over four years in the June quarter, data showed Wednesday, increasing expectations of a rate cut next month. Headline inflation rose just 2.1% on year, down from 2.4% in the March quarter and below the 2.2% in a Reuters poll. (Pratiksha) 

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India Rupee: Forward premiums steady on caution ahead of US FOMC outcome

 

	AT 1422 IST	AT 0900 IST	HIGH	LOW	PREVIOUS (AT 1530 IST)
Spot rupee per $1	87.4000	87.0900	87.0550	87.4425	86.8150
1-year dlr/rupee fwd (paise)	178.15	177.65	178.91	177.12	176.50

 

NEW DELHI – The one-year dollar/rupee forward premium was largely steady as market participants awaited the outcome of the US Federal Open Market Committee's meeting later in the day, where the central bank is expected to keep the benchmark rate unchanged, dealers said. 

 

Traders see a 98% probability of the US Federal Reserve holding rates at 4.25-4.50%, according to the CME FedWatch tool. Forwards of a currency pair are reflective of the interest rate differential between the two countries. "Most likely FOMC will be on expected lines, but we need to know what the future course of action is," a dealer at a private-sector bank said. "That will give medium term direction to forwards."

 

Meanwhile, noting a slump in the rupee in the spot market, some banks bought dollars for forward delivery on behalf of importers as they expect the Indian unit to depreciate further in the near term, supporting the premiums, dealers said. The rupee fell to an over five-month low of 87.4425 a dollar during the day owing to strong foreign portfolio outflows after US President Donald Trump's comments hinted at 20-25% tariff on India. "Initially, we saw some recieving in the market but since the spot (rupee) went lower, there has been continuous paying," a dealer at another private-sector bank said.

 

Further, yield on the benchmark 10-year US Treasury note fell ahead of the FOMC decision on Wednesday, slightly supporting the premiums, according to dealers. The 10-year US bond yield fell to 4.34% Tuesday as against 4.42% Monday. 

 

At 1422 IST, the one-year exact period dollar/rupee forward premium was 2.03%, unchanged against Tuesday's close. On an absolute basis, the premium was at 178.15 paise, against 176.50 paise Tuesday. (Pratiksha)

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India Rupee: Hits 5-mo low on FPI, oil cos' dlr buys; RBI action limits fall

 

	AT 1300 IST	AT 0900 IST	HIGH	LOW	PREVIOUS(AT 1530 IST)
Spot rupee per $1	87.3625	87.0900	87.0550	87.3900	86.8150

 

MUMBAI – The rupee hit its lowest level in nearly five months against the dollar Wednesday on persistent dollar purchases by banks on behalf of foreign portfolio investors and oil marketing companies, dealers said. However, they said the Reserve Bank of India stepped in with dollar sales at multiple levels, which prevented the domestic currency from falling further. 

 

"RBI was there since morning, especially at 15 (87.15) and 25 (87.25), after which they kind of let go," a currency trader at a brokerage firm said. Dealers said the intervention by the RBI was relatively mild in nature. Due to persistent dollar purchases, the rupee also triggered stop-losses on dollar bets, dealers said. Noting the slump of the rupee, a few exporters sold the greenback to take advantage of the relatively higher dollar/rupee levels, dealers said. This also supported the rupee, according to them. 

 

The rupee came under immense pressure as investors' risk appetite was hit after US President Donald Trump hinted at 20-25% tariff on India, against the backdrop of a delayed interim India-US trade deal, dealers said. However, Trump said the tariff rates were not finalised as New Delhi and Washington are in talks to strike a trade deal before Aug. 1.

 

India was hit by 26% tariff in April and market participants expected an interim trade deal between the two countries in early July. Delay in a trade agreement has kept investors rattled, prompting them to withdraw funds from Indian financial markets and move to other safe haven assets, dealers said. So far in July, FPIs have withdrawn $1.9 billion worth of investments from domestic markets. 

 

Oil marketing companies also rushed to purchase dollars, fearing a further rise in crude prices amid rising geopolitical tension between the US and Russia. Trump on Tuesday said Moscow should progress towards a ceasefire with Ukraine in the ongoing three-and-a-half year war in another "10 days", else the US will impose sanctions against Russia, potentially disrupting the global supply chain.

 

At 1324 IST, the September Brent crude contract on the Intercontinental Exchange was at $73.09 per barrel, against $72.51 per barrel Tuesday and $70.04 Monday. Crude oil prices hit an over five-week high of $73.10 per barrel Wednesday.

 

For the rest of the day, the rupee is seen moving in a range of 87.00 to 87.45 against the greenback. Dealers peg key technical support for the rupee at 87.45 a dollar.  (Gowri Lakshmi)

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India Rupee: Technical levels for rupee - Jul 30

 

MUMBAI – At 1149 IST, the rupee was at 87.2700 per dollar. At 0900 IST, the rupee was at 87.0900 a dollar, against the previous close of 86.8150. Following are the key support and resistance levels for the rupee as provided by leading banks and brokerages:

 

Participants	S2	S1	R1	R2
Private-sector bank	87.30	87.20	87.18	86.90
Brokerage firm	87.30	87.20	87.07	86.95
Brokerage firm	87.59	87.10	86.80	86.62
Brokerage firm	87.32	87.22	86.92	86.82

(Gowri Lakshmi)

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India Rupee - Asia FX: Mixed as investors brace for US tariff deadline

 

MUMBAI – Asian currencies traded on a mixed note Wednesday as investors continued to assess and brace for the Aug. 1 tariff deadline. The dollar index remained broadly steady ahead of the US Federal Open Market Committee's policy outcome, due late Wednesday. The US Fed is widely expected to hold the benchmark lending rates steady at 4.25-4.50%, with traders seeing a 96.99% chance of the US central bank maintaining status quo, according to CME FedWatch tool. At 1027 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 98.83, broadly steady against 98.90 Tuesday and 98.66 Monday.

 

The Taiwan dollar was down 0.1% against the greenback. Taiwan continues its talks with the US on tariffs, seeking to avert the tariffs with no outcome so far. "All the relevant talks are still ongoing," Reuters reported citing a source. The South Korean won was up 0.5% against the US dollar as optimism around US-South Korea trade deal rose. Three top cabinet officials from South Korea met US Commerce Secretary Howard Lutnick in Washington in a move to conclude a trade deal, Seoul said Wednesday. 

 

The Philippine peso traded flat against the dollar. Philippines' Central Bank Governor Eli Remolona said the central will consider lowering the key lending rate at its next Aug. 28 meeting, at the backdrop of a slower inflation. He also added two more rate cuts are possible. The Indonesian rupiah was rose 0.1% while the Malaysian ringgit and Thai baht traded flat against the greenback. 

 

The offshore Chinese yuan also traded flat. China's finance minister Lan Fo'an vowed on Wednesday to speed up the implementation of childcare subsidy policy ramp up the economy, media reports said.  (Gowri Lakshmi)

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India Rupee: Slumps below 87/$ as investors assess Trump comment on tariffs

 

	AT 0934 IST	AT 0900 IST	HIGH	LOW	PREVIOUS(AT 1530 IST)
Spot rupee per $1	87.1475	87.0900	87.0600	87.1775	86.8150

 

MUMBAI – The rupee slumped past the psychologically crucial level of 87-per-dollar mark and fell to an over four-month low of 87.1775 against the greenback in early trade Wednesday as investors assessed US President Donald Trump's comment on likely tariffs on India, dealers said. "I think it's game-over for rupee," a dealer at a private sector bank said. "We have to just wait and watch." 

 

The rupee came under pressure after Trump Tuesday hinted that India might be hit with a 20-25% tariff, a tad lower than the 26% reciprocal tariff announced in April. However, since the trade negotiations between New Delhi and Washington are underway, Trump said the final deal and tariffs had not been finalised yet, as New Delhi seeks an interim trade deal before the Aug. 1 tariff deadline.  

 

"India has been a good friend, but India has charged basically more tariffs than almost any other country," Trump said. "You just can't do that." Dealers said a delay in the India-US interim trade deal is keeping investors on tenterhooks. The rupee came under pressure as banks purchased dollars, likely on behalf of foreign portfolio investors, who withdrew funds from Indian financial markets and moved to other safe-haven assets, dealers said. 

 

The rupee was also under pressure due to a rise in crude oil prices, dealers said. Oil prices rose over 3% Monday and extended the gains after Trump ramped up pressure on Russia over its war with Ukraine. On Tuesday, Trump said he would start imposing tariffs and other measures on Russia "10 days from today" if Moscow did not make progress in achieving a ceasefire with Kyiv. 

 

At 0944 IST, the September Brent crude contract on the Intercontinental Exchange was at $72.59 per barrel, against $72.51 per barrel Tuesday and $70.04 Monday. Crude oil prices hit an over five-week high of $73.06 per barrel Tuesday.

 

However, some dealers speculated that a further fall of the domestic currency was checked as the Reserve Bank of India likely sold dollars at 87.15 per dollar and below levels. Dealers also said that despite the sharp fall of the rupee, most exporters remained on the sidelines, anticipating a steeper fall.

 

During the day, the rupee is seen moving in a range of 86.80 to 87.20 against the greenback. Dealers peg key technical support for the rupee at 87.20 a dollar.  (Gowri Lakshmi)

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India Rupee: Expected range for rupee - Jul 30

 

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

 

PARTICIPANT	SUPPORT	RESISTANCE
Private-sector bank	87.20	86.90
Private-sector bank	87.30	86.90
Foreign bank	87.30	86.80
Foreign bank	87.30	86.70
Brokerage firm	87.22	86.92

 

 

 

 

 

 

 

 

(Gowri Lakshmi and Sourabh Kumar)

 

End

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

 

Edited by Tanima Banerjee

 

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