India Rupee Review
Off high on rise of dlr index to 2-mo high, FPI outflows
This story was originally published at 17:36 IST on 1 August 2025
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By Pratiksha
NEW DELHI – The rupee ended off the day's high against the dollar Friday as the dollar index strengthened to an over two-month high during European trade, dealers said. Further, banks persistently bought the greenback for importers and foreign portfolio investors, which also weighed on the Indian unit, they said.
"The dollar index has gone to 100 after a long time, so that is definitely impacting the rupee," a dealer at a state-owned bank said. "Importers are also buying (dollars) on every dip (in dollar/rupee)." Earlier in the day, the Indian currency was supported by foreign fund inflows related to initial public offerings of domestic companies and likely dollar sales by the Reserve Bank of India, according to dealers.
After rising to a high of 87.2125 a dollar earlier in the day, the rupee settled at 87.5400 a dollar against 87.5950 on Thursday. The rupee depreciated 1.2% against the dollar this week.
The rupee was the second best performer amongst its emerging market peers. Most other Asian currencies fell 0.2-0.8% against the greenback, with the South Korean won being the worst hit. Only the Philippines peso was up against the dollar.
The Indian currency opened steady at 87.6000 a dollar but rose shortly after as the central bank likely stepped in to sell dollars to support it, dealers said. "In the morning itself they (RBI) came in the market," a dealer at a private-sector bank said. "Seems like they don't want high volatility, so are keeping their presence intact."
Banks also sold the greenback on behalf of overseas investors looking to invest in the IPOs of domestic companies, following which the rupee jumped to the day's high, dealers said. The public issues of National Securities Depository Ltd., Sri Lotus Developers and Realty Ltd., and M&B Engineering Ltd., all of which had opened on Wednesday, closed Friday.
As soon as the rupee surged, banks stepped in to purchase the greenback on behalf of importers, who wanted to make the most of the relatively lower dollar/rupee levels, dealers said. "Importers are aggressively coming at every dip (in dollar/rupee). There was demand (for dollars) pressure at all times," a dealer at another private-sector bank said. The rupee depreciated 2.1% against the dollar last month.
Further, banks bought the greenback on behalf of FPI, who looked to pull out funds from domestic equities, which also weighed on the local unit, dealers said. Investors have turned risk averse after US President Donald Trump Wednesday announced a 25% tariff on India along with an additional penalty, coming into effect from Friday. In July, FPIs withdrew almost $2.15 billion worth of funds from local equities. On Friday, the Sensex and Nifty 50 ended 0.7% and 0.8% lower, respectively.
The dollar index touched an over two-month high, rising above the 100-mark, during European trade as Trump Thursday signed an executive order, which modified reciprocal tariffs on several countries, with updated tariffs now ranging from 10-40%.
The dollar index also gained as data released on Thursday showed the US Personal Consumption Expenditures Price Index rose 0.3% in June after an upwardly revised 0.2% rise in May. Economists polled by Reuters had forecast the index to climb 0.3%. The US Core Personal Consumption Expenditures Price Index inflation, the US Federal Reserve's preferred inflation gauge, rose 0.3% in June.
At 1530 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 100.22, against 100.05 Thursday and 99.89 Wednesday. The dollar index rose to a high of 100.26 during the day, its highest level since May 29.
| AT 1530 IST | AT 0900 IST | HIGH | LOW | PREVIOUS(AT 1530 IST) | |
| Spot rupee per $1 | 87.5400 | 87.6000 | 87.2125 | 87.6000 | 87.5950 |
| 1-year dlr/rupee fwd (paise) | 171.16 | 172.66 | 171.16 | 172.66 | 171.55 |
FORWARDS
The one-year dollar/rupee forward premium ended largely steady as banks' dollar purchases for forwards delivery on behalf of importers offset the impact of a rise in US Treasury yields, dealers said.
US Treasury yields rose as traders assessed the impact of US President Donald Trump's recent tariffs on multiple nations on the US economy. Investors also pared bets of a rate cut by the US Federal Open Market Committee in September after Fed Chair Jerome Powell's comments indicated rates may stay on hold for longer. Forwards of a currency pair are reflective of the interest rate differential between two countries. The Fed held interest rates steady on Wednesday in the 4.25-4.50% range for the fifth consecutive meeting.
Further, banks bought the greenback for forward delivery on behalf of importers on expectations that the rupee may depreciate in the near term after Trump announced 25% tariff, plus penalty, on India on Wednesday, dealers said.
Further, the Reserve Bank of India is expected to give delivery of $5 billion on its dollar/rupee buy-sell swaps maturing on Monday, given the ample rupee liquidity in the banking system. This, dealers said, is expected to boost the forward premiums next week.
At 1530 IST, the one-year exact period dollar/rupee forward premium was 1.96%, against Thursday's close of 1.97%. On an absolute basis, the premium was at 171.16 paise, against 171.55 paise Thursday.
OUTLOOK
On Monday, the rupee will take cues from movement of the dollar index after the US jobs data, due later in the day, dealers said. Market participants await the key US economic data to form a firm opinion about a Fed rate cut next month. Market participants will also closely monitor developments on the US tariff front.
"If the dollar index rises more next week, which may be a possibility, the rupee may be in for more trouble," a dealer at a brokerage firm said. "But I think RBI will not let 88.00 break that easily, looking at the last few days' action."
FPIs may continue to buy the greenback to withdraw funds from the Indian markets, weighing on the Indian unit. Traders will watch out if the central bank will intervene in the domestic spot market through dollar sales and prevent the local unit from falling beyond the psychologically-crucial 88-per-dollar mark.
During the day, the rupee is expected to move in a range of 87.30 to 87.80 a dollar. Dealers peg key technical support for the rupee at 87.60 a dollar.
India Rupee - World FX: Dollar soars to 2-mo high; mkts assess tariff news
| AT 1507 IST | HIGH | LOW | PREVIOUS | |
| GBP/USD | 1.3150 | 1.3213 | 1.3146 | 1.3203 |
| EUR/USD | 1.1402 | 1.1438 | 1.1402 | 1.1414 |
| NZD/USD | 0.5862 | 0.5894 | 0.5859 | 0.5888 |
| AUD/USD | 0.6422 | 0.6440 | 0.6420 | 0.6424 |
| USD/JPY | 150.4540 | 150.9170 | 150.4120 | 150.6910 |
| USD/CAD | 1.3875 | 1.3876 | 1.3845 | 1.3848 |
| EUR/JPY | 171.5520 | 172.3890 | 171.5390 | 171.9770 |
| CHF/USD | 1.2255 | 1.2316 | 1.2238 | 1.2295 |
| EUR/CHF | 0.9304 | 0.9322 | 0.9274 | 0.9277 |
MUMBAI – The dollar index hit a two-month high Friday on easing trade war worries and better clarity on US trade deals. The US reciprocal tariffs are effective Friday. President Donald Trump Thursday signed an executive order, modifying the reciprocal tariffs on the country's trading partners.
"Other trading partners, despite having engaged in negotiations, have offered terms that, in my judgment, do not sufficiently address imbalances in our trading relationship or have failed to align sufficiently with the United States on economic and national-security matters," Trump said. The modified tariffs now range from 10-41%.
Trump said countries that are not listed in the latest order will face an additional tariff of 10%. "All goods that are considered to have been transhipped to avoid the import duties will be subjected to additional 40% tariff," the White House Thursday said.
The dollar was also supported by safe-haven inflows and strong economic data. The US Personal Consumption Expenditures Price Index rose 0.3% in June after an upwardly revised 0.2% gain in May. Economists polled by Reuters had forecast the index to climb 0.3%. The US Core Personal Consumption Expenditures Price Index inflation, the US Federal Reserve's preferred inflation gauge, rose 0.3% in June. The latest initial jobless claims data indicated a resilient US labour market. The initial jobless claims for the week ended Saturday showed the number of Americans filing new applications for unemployment benefits rose 1,000 to a seasonally adjusted 218,000. Economists had forecast 224,000 claims for the same period in a Reuters poll.
At 1521 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 100.18, against 100.05 Thursday and 99.89 Wednesday. The dollar index rose to a high of 100.19, its highest level since May 29. Market participants now await the non-farm payrolls data for July and the Purchasing Managers' Index for July due later in the day.
The euro was down 0.1?ter the European Commission and European Union diplomats said Thursday that European wine and spirits will face 15% US tariff until a separate deal is agreed with Washington, DC. "The Commission remains determined to achieve and secure the maximum number of carve-outs including ... wine and spirits," Commission spokesperson Olof Gill said. "It is not our expectation that wine and spirits will be included as an exemption in the first group announced by the US tomorrow. And therefore that sector will be captured by the 15?iling."
The eurozone Purchasing Managers' Index published Friday showed the reading rose to a 36-month high of 49.80 in July. However, it still remained in negative territory. A reading below 50 indicates contraction.
The Japanese yen was up 0.2% against the greenback. Japan's unemployment rate held steady at 2.5% in June, in line with analyst expectations in a Reuters poll. The jobs-to-applications ratio in June fell to 1.22 from 1.24 in May. The pound sterling was down 0.5%. UK's Purchasing Managers' Index improved for the fourth month to 48.0 in July from 47.7 in June.
The Canadian dollar was down 0.1% as Ottawa now faces a 35% duty. Trump issued a separate order for Canada Friday, raising the tariff from 25%, saying Canada had "failed to cooperate" in curbing fentanyl flows into the US. The Swiss franc was down 0.5% against the dollar. The Australian dollar was down 0.1%. The New Zealand dollar fell 0.4% against the greenback. (Gowri Lakshmi)
India Rupee: Premium steady as rise in US yields offset importers' fwd dollar buys
| AT 1435 IST | AT 0900 IST | HIGH | LOW | PREVIOUS (AT 1530 IST) | |
| Spot rupee per $1 | 87.4625 | 87.6000 | 87.2125 | 87.6000 | 87.5950 |
| 1-year dlr/rupee fwd (paise) | 171.66 | 172.66 | 171.16 | 172.66 | 171.55 |
NEW DELHI – The one-year dollar/rupee forward premium was largely steady as banks' dollar purchases for forwards delivery on behalf of importers offset the impact of a rise in US Treasury yields, dealers said. "We have seen aggressive paying with the rupee falling in spot," a dealer at a state-owned bank said. "US rate cut view has led to some receiving."
US Treasury yields rose as traders assessed the impact of US President Donald Trump's recent tariffs on multiple nations on the economy. Investors also pared back bets of a rate cut by the US Federal Open Market Committee in September after Fed Chair Jerome Powell's comments indicated rates may stay on hold for longer. Forwards of a currency pair are reflective of the interest rate differential between the two countries. The Fed held interest rates steady on Wednesday in the 4.25-4.50% range for the fifth consecutive meeting.
Further, banks bought the greenback for forward delivery on behalf of importers on expectations that the rupee may depreciate in the near term after Trump announced 25% tariff, plus penalty, on India on Wednesday, dealers said. The rupee rose to 87.2125 a dollar in the spot market on Friday but erased a significant portion of its gains and was at 87.4625 a dollar at 1435 IST, against 87.5950 on Thursday. The rupee depreciated 2.1% against the dollar last month.
Market participants now await the US jobs data, due later in the day, to get a firm opinion about a Fed rate cut next month. Further, the Reserve Bank of India is expected to give delivery of $5 billion on its dollar/rupee buy-sell swaps maturing on Monday, given the ample rupee liquidity in the banking system. This, dealers said, is expected to boost the forward premiums next week.
At 1435 IST, the one-year exact period dollar/rupee forward premium was 1.96%, against Thursday's close of 1.97%. On an absolute basis, the premium was at 171.66 paise, against 171.55 paise Thursday. (Pratiksha)
India Rupee: Pares some gains on importers' dlr buys; RBI dollar sales support
| AT 1412 IST | AT 0900 IST | HIGH | LOW | PREVIOUS (AT 1530 IST) | |
| Spot rupee per $1 | 87.4550 | 87.6000 | 87.2125 | 87.6000 | 87.5950 |
MUMBAI – The rupee erased some of its gains against the dollar from early trade due to aggressive dollar purchases by importers, dealers said. Banks' dollar buys for foreign portfolio investors also put the rupee under pressure, according to some dealers. However, banks' dollar sales on behalf of the Reserve Bank of India supported the Indian currency. The Indian unit hit a high of 87.2125 a dollar earlier in the day on foreign fund inflows related to the initial public offering of the National Securities Depository Ltd, which will close later in the day.
"RBI is there in the market, pretty active but they are on and off. They come and they sell around $500 million in one shot and then stay away for a while," a dealer at a foreign bank said.
The rupee erased some of the early gains as banks purchased dollars for importers, who were wary of a sharp fall of the domestic currency in the coming days, mostly due to mixed sentiment about the India-US trade deal and the impact of the US reciprocal tariffs, effective Friday. Dealers expect the rupee to stabilise at around 87.70 against the dollar in the near term. "Without any further negative news, I think RBI will hold (the fall of the rupee," a dealer at a private sector bank said.
The rupee was also weighed down as foreign portfolio investors withdrew funds from the domestic stock market and moved to other safe-haven assets due to uncertainty about the tariff impact on the Indian economy, dealers said. At 1356 IST, benchmark domestic stock indices Nifty 50 and BSE Sensex were down 0.5% and 0.4%, respectively. In July, overseas investors sold $2.15 billion worth of shares from the Indian equity market as of Jul. 30.
"FPIs selling (shares) is expected to continue, but it should reduce in the coming days. And whoever (FPIs) has not sold till now, they are optimistic about the Indian market," another dealer at a public sector bank said.
The dollar index hovered near its two-month high hit in early Asian trade, which further weighed on the rupee, dealers said. The index advanced and breached the crucial level of 100 on Thursday, after trade war tensions eased and as investor sentiment turned positive due to better clarity about US trade deals. At 1412 IST, the dollar index, which measures the strength of the dollar, against a basket of six major currencies, was at 100.07, against 100.05 Thursday and 99.89 Wednesday. The dollar index rose to a high of 100.15 on Friday, its highest level since May 29.
For the rest of the day, the rupee is seen moving in a range of 87.35 to 87.50 against the dollar. Dealers peg key technical resistance for the Indian unit at 87.35 a dollar. (Gowri Lakshmi)
India Rupee - Asia FX: Most dn; dollar hits 2-month high; investors eye tariff news
MUMBAI – Most Asian currencies were down against the US dollar as the dollar index rose to a two-month high after recent economic data and easing trade war worries. However, investors across markets remained rattled as they digested the latest developments. US President Donald Trump Thursday signed an executive order modifying the US reciprocal tariffs on several countries, with the import duties now ranging from 10-41%. "All goods that considered to have been transshiped to avoid the import duties will be subjected to additional 40% tariff", the White House said.
"... Despite having engaged in negotiations, have offered terms that, in my judgment, do not sufficiently address imbalances in our trading relationship or have failed to align sufficiently with the United States on economic and national-security matters," Trump said.
Data published on Thursday showed that the US personal consumption expenditure price index rose 0.3% in June after an upwardly revised 0.2% gain in May. Economists polled by Reuters forecast the index to climb by 0.3%. Annually, the consumer expenditure price index advanced 2.6?ter rising 2.4% the month prior. Core personal consumption expenditure price index, the US Federal Reserve's preferred gauge of inflation, rose 0.3% on month to 2.8% on year.
The initial jobless claims data for the week ended Saturday showed the number of Americans filing new applications for unemployment benefits rose marginally, indicating a still resilient US labour market. The initial jobless claims rose by 1,000 to a seasonally adjusted 218,000. Economists forecast 224,000 claims for the same period in a Reuters poll.
At 1035 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 100.03, against 100.05 Thursday and 99.89 Wednesday. The index hit a high of 100.15 in early trade Friday, its highest level since May 29. The Indonesian rupiah and the Malaysian ringgit were down 0.2% against the greenback. Malaysian Premier Anwar Ibrahim Thursday said the US tariff rate on Malaysian goods will be announced Friday.
Malaysia's headline inflation slipped to 1.1% in June, from 1.2% in May while core inflation remained unchanged at 1.8%, Bank Negara Malaysia said Thursday. "Higher inflation in selected core items--such as food away from home and streaming services--was largely offset by lower inflation for mobile communications services and video game consoles," the central bank statement said.
The offshore Chinese yuan fell 0.1?ter Asia's factory activity fell in July as dampened global demand and persisting uncertainty over US tariffs weighed on business morale, data published Friday said. The S&P Global China General manufacturing purchasing managers' index fell to 49.5 in July from 50.4 in June, against analyst expectations of a flat reading in a Reuters poll.
The Thai baht was down 0.1% against the greenback. The US set a 19% tariff on Thailand and Cambodia, down from 36?rlier, after Trump threatened to block trade deals if they did not end the border clash. The South Korean won was down 0.4?ter the factory activity in South Korea shrank for the sixth consecutive month in July. The purchasing managers' index for manufactureses fell to 48.0 in July from 48.7 in June.
The Taiwan dollar was down 0.2% against the dollar. Taiwan's central bank warned that the US tariffs are clouding on the economic outlook for the rest of the year, despite an ease in inflation. The minutes of the monetary policy meeting of the central bank called for more flexibility in the policy. "Domestic inflation has continued easing and the economic conditions remain stable, heightened uncertainty in the international economic and trade environment may weigh on Taiwan's economic growth," several board members said.
Bucking the trend, the Philippines' peso was up 0.1% against the dollar. (Gowri Lakshmi)
India Rupee: Technical levels for rupee - Aug 1
MUMBAI – At 1052 IST, the rupee was at 87.3250 per dollar. At 0900 IST, the rupee was at 87.6000 a dollar, against the previous close of 87.5950. Following are the key support and resistance levels for the rupee as provided by leading banks and brokerages:
| Participants | S2 | S1 | R1 | R2 |
| Public-sector bank | 88.00 | 87.85 | 87.50 | 87.20 |
| Private-sector bank | 87.85 | 87.55 | 87.30 | 87.20 |
| Brokerage firm | 87.87 | 87.75 | 87.22 | 87.12 |
(Gowri Lakshmi)
India Rupee: Surges on FX inflows, exporters' dlr sales; rise in dlr weighs
| AT 0947 IST | AT 0900 IST | HIGH | LOW | PREVIOUS (AT 1530 IST) | |
| Spot rupee per $1 | 87.3575 | 87.6000 | 87.2825 | 87.6000 | 87.5950 |
MUMBAI – The rupee surged against the dollar Friday as banks sold dollars for foreign fund inflows, likely relating to initial public offerings of domestic companies, dealers said. Banks also sold dollars on behalf of exporters, who wanted to take advantage of the relatively higher dollar/rupee levels, which supported the rupee, dealers said. However, a rise in the dollar index weighed on the rupee, according to some of them.
"There were selling for exporters and there were some inflows for NSDL as well. But the rupee will likely stabilise around 87.75 levels once the inflows stop because the strength in dollar index will start reflecting on the levels," a dealer at a public sector bank said. The IPO of National Securities Depository Ltd. opened for subscription Wednesday and will close later in the day. The Indian unit hit a high of 87.2825 against the greenback in early trade.
Dealers said that despite the latest US tariff developments and tariffs coming into effect, the market remained relatively calm. "It is honestly surprising, the market has no reaction to the tariff news now, not atleast in terms of price movements. I think market has discounted the impacts of it," the dealer at the public sector bank said. US President Donald Trump Thursday signed an executive order modifying the tariffs on its trading partners, with the import duties now ranging from 10% to 40%.
Following his announcement and the recent policy announcement by the US Federal Open Market Committee late Wednesday, the dollar index soared to a two—month high, breaching the crucial level of 100 on Thursday. The dollar was also supported by safe-haven flows and recent economic data.
Data published on Thursday showed the US personal consumption expenditure price index, the US Federal Reserve's preferred gauge of inflation, rose 0.3% in June after an upwardly revised 0.2% gain in May. Annually, the consumer expenditure price index advanced 2.6?ter rising 2.4% the month prior. Core inflation was at 0.3% on month and 2.8% on year. The initial jobless claims data for the week ended Saturday showed the number of Americans filing new applications for unemployment benefits rose marginally, indicating a resilient US labour market.
At 0937 IST, dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 100.04, against 100.05 Thursday and 99.89 Wednesday. The index hit a high of 100.15 in early trade Friday, its highest level since May 29.
During the day, the rupee is seen moving in a range of 87.20 to 87.70 against the dollar. Dealers peg key technical resistance for the rupee at 87.25 a dollar. (Gowri Lakshmi)
India Rupee: Expected range for rupee - Aug 1
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:
| PARTICIPANT | SUPPORT | RESISTANCE |
| Private sector bank | 87.85 | 87.55 |
| Private sector bank | 87.80 | 87.55 |
| Brokerage firm | 87.88 | 87.35 |
| Brokerage firm |
87.99 |
87.45 |
(Gowri Lakshmi)
End
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Ashish Shirke
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