India Rupee Review
At record closing low on importers' dlr buys, FX outflows
This story was originally published at 17:41 IST on 4 August 2025
Register to read our real-time news.Informist, Monday, Aug. 4, 2025
By Kabir Sharma and Pratiksha
MUMBAI – The rupee ended at a record closing low against the dollar on Monday after erasing all its gains from earlier in the session, as banks' dollar purchases for importers and foreign fund outflows offset the impact of a sharp fall in the dollar index, dealers said. The rupee could not withstand the high demand for dollars despite a sharp fall in crude oil prices, according to dealers.
"The morning losses in the dollar faded after importers jumped on the opportunity to buy it cheap," a dealer at a state-owned bank said. "There was demand from FPIs as well which also supported the market," they said.
After opening sharply higher at 87.2150 per dollar, and touching a high of 87.2000 a dollar, the rupee erased all gains and fell to 87.6550 per dollar at close on Monday, against Friday's close of 87.5400 a dollar. With a fall of 0.1% against the dollar, the rupee was the worst-performing Asian currency. Other emerging market currencies rose 0.2-1.4% against the dollar on Monday, with the Phillipine peso being the worst hit.
The Indian unit opened sharply higher against the dollar on Monday as the dollar index dropped sharply after a weak US jobs data report increased bets of the US Federal Reserve cutting rates at its September meeting. Traders are now seeing an 86% probability of a September rate cut by the Fed compared with 37.7?fore the data, according to CME Group's FedWatch tool.
At 1621 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 98.87, against 98.69 Friday and 100.05 Thursday.
US non-farm payrolls rose by 73,000 in July, the US Bureau of Labor Statistics reported Friday. This reading was lower than the market expectation of 110,000, and followed the increase of 14,000 in the revised figure for June. This pointed to a worse-off labour market than earlier thought and raised investors' expectations of a rate cut by the US Federal Reserve.
A fall in crude oil prices also supported the Indian unit, dealers said. Oil prices declined Sunday after the Organization of the Petroleum Exporting Countries and its allies decided to go for another large production increase in September. OPEC and its allies agreed to raise production by 547,000 barrels per day in September. The organisation cited a healthy economy and low stocks as reasons behind its decision. At 1622 IST, the October Brent crude contract on the Intercontinental Exchange was at $68.59 per barrel against $69.67 per barrel Friday and $72.53 per barrel Thursday.
As the rupee had opened sharply higher, importers were attracted to the low dollar/rupee levels seen after almost a week, dealers said. Importers rushed to stock up on dollars as soon as the rupee touched the day's high of 87.2000 a dollar. Dealers said some foreign banks also purchased dollars on behalf of foreign investors as they were not allotted shares of National Securities Depository Ltd. in its initial public offering. This dragged the local unit to the day's low of 87.6925 a dollar.
NSDL's offer opened for subscription on Wednesday and closed on Friday. The public offer was subscribed over 41 times as of the final day. The company received bids for 1.44 billion shares against 35.13 million shares on offer.
"The buying (of dollars) was mainly by oil companies, FPIs and importers, while some buying was due to refund of un-allotted NSDL IPO subscriptions. FPIs have started August with sizeable equity sales and would have continued the same today," Anil Kumar Bhansali, head of treasury and executive director at Finrex Treasury Advisors LLP, said.
As soon as the Indian currency fell past 87.60 a dollar, some dealers speculated that the Reserve Bank of India stepped in through dollar sales to prevent the Indian unit from falling sharply, albeit not aggressively. Some exporters also stepped in to sell dollars noting the relatively higher dollar/rupee levels, supporting the Indian unit, as per dealers. A rise in other Asian currencies also supported the Indian unit, according to dealers.
Some dealers said that growing expectation of a rate cut by the RBI's Monetary Policy Committee on Wednesday may have also weighed on the Indian unit. Market participants are of the view that with inflation at a six-year low, worries over slowing economic growth, which have been aggravated with the imposition of tariffs by US President Donald Trump, there are chances the rate-setting panel may opt for rate cut this time as well. In June, the Monetary Policy Committee had cut the repo rate by a larger-than-expected 50 basis points and changed the stance to neutral from accommodative.
| AT 1530 IST | AT 0900 IST | HIGH | LOW | PREVIOUS(AT 1530 IST) | |
| Spot rupee per $1 | 87.6550 | 87.2150 | 87.2000 | 87.6925 | 87.5400 |
| 1-year dlr/rupee fwd (paise) | 178.89 | 178.19 | 179.89 | 177.79 | 171.16 |
FORWARDS
The one-year dollar/rupee forward premium ended sharply higher Monday as US Treasury yields fell after a weak US jobs report prompted market participants to increase bets of imminent US Federal Reserve rate cuts, dealers said. Forwards of a currency pair are reflective of the interest rate differential between the two countries.
The Fed held interest rates steady last week in the 4.25-4.50% range for the fifth consecutive meeting. With the Fed likely to go for a rate cut in September, and slim chances of a rate cut by the Reserve Bank of India for the rest of the year, the interest rate differential between the US and India may widen further, dealers said.
Further, most dealers said the Reserve Bank of India likely gave delivery of $5 billion on its dollar/rupee buy-sell swaps maturing on Monday, given the ample rupee liquidity in the banking system. This may have also boosted the forward premiums, they said.
At 1530 IST, the one-year exact period dollar/rupee forward premium was 2.04%, against Friday's close of 1.96%. On an absolute basis, the premium was at 178.89 paise, against 171.16 paise Friday. Premium touched an over one-month high of 2.06?rlier in the day.
OUTLOOK
On Tuesday, the rupee will take cues from movement in the dollar index and crude oil prices, dealers said. Market participants will also closely monitor developments on the US tariff front.
"The rupee has not been able to sustain its gains in the recent sessions," a dealer at a foreign bank said. "So it is pretty clear that 88.00 (a dollar) is still a possibility."
FPIs may continue to buy the greenback to withdraw funds from the Indian markets, weighing on the Indian unit, dealers said. 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 immediate key technical support for the rupee at 87.70 a dollar.
India Rupee - World FX: Euro falls; dlr index remains weak post US jobs data
| AT 1535 IST | HIGH | LOW | PREVIOUS | |
| GBP/USD | 1.3288 | 1.3306 | 1.3253 | 1.3281 |
| EUR/USD | 1.1561 | 1.1597 | 1.1550 | 1.1589 |
| NZD/USD | 0.5911 | 0.5923 | 0.5904 | 0.5914 |
| AUD/USD | 0.6476 | 0.6486 | 0.6463 | 0.6467 |
| USD/JPY | 147.8270 | 148.3100 | 147.0650 | 147.3790 |
| USD/CAD | 1.3782 | 1.3794 | 1.3768 | 1.3798 |
| EUR/JPY | 170.9170 | 171.9717 | 170.4820 | 170.8200 |
| CHF/USD | 1.2355 | 1.2448 | 1.2353 | 1.2432 |
| EUR/CHF | 0.9357 | 0.9362 | 0.9314 | 0.9320 |
MUMBAI – The euro fell 0.1% against the dollar Monday after data showed investor sentiment in the Eurozone unexpectedly fell in August in one of the first indications that the business community is not happy with the European Union's new trade deal with the US, a survey showed on Monday.
The Sentix index for the Eurozone turned negative in August, declining to -3.7 from 4.5 the month before, ending three months of rise and falling far short of a forecast from analysts polled by Reuters of an increase to 8.0 this month. Further, data on Monday showed the number of people registering as jobless in Spain fell by 0.1% in July from a month earlier, or by 1,357, leaving a total of 2.40 million people out of work.
Further, the dollar index remained broadly weak as a soft US jobs report led investors to ramp up bets of imminent Federal Reserve rate cuts. Data on Friday showed US employment growth undershot expectations in July while the nonfarm payrolls count for the prior two months was revised down by a huge 258,000 jobs, suggesting a sharp deterioration in labour market conditions. Nonfarm payrolls increased by 73,000 jobs last month after rising by a downwardly revised 14,000 in June, the fewest in nearly five years, the Labor Department's Bureau of Labor Statistics said. Economists polled by Reuters had forecast payrolls would increase by 110,000 jobs after rising by a previously reported 147,000 in June.
Traders are now betting on an 87.5% probability for a September rate cut by the Fed compared with 37.7?fore the US jobs data, according to CME Group's FedWatch tool. At 1535 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 98.81, against 98.69 Friday and 100.05 Thursday. Both the pound sterling and the Australian dollar rose 0.2% against the greenback, tracking weakness in the dollar.
The Swiss franc was down 0.6% against the dollar. The Switzerland government Sunday said it is open to revising its offer to the US in response to planned heavy tariffs after US President Donald Trump last week said he will impose a 39% levy on imports from Switzerland, one of the highest tariff rates. (Pratiksha)
India Rupee: Gives up most gains on FX outflows, dollar buys by importers
| AT 1225 IST | AT 0900 IST | HIGH | LOW | PREVIOUS(AT 1530 IST) | |
| Spot rupee per $1 | 87.5025 | 87.2150 | 87.2000 | 87.5375 | 87.5400 |
MUMBAI – The rupee erased most of its early gains against the dollar Monday as state-owned and foreign banks persistently bought the greenback for importers and foreign fund outflows, dealers said. The Indian currency had hit a high of 87.2000 a dollar earlier in the day.
State-owned banks bought the US unit on behalf of importers, who wanted to take advantage of the relatively lower dollar/rupee levels, which weighed on the Indian unit, dealers said. "These are good levels for importers, so we saw good demand (for dollars) in the morning," a dealer at a private-sector bank said.
Dealers said some foreign banks purchased dollars on behalf of foreign investors as they were not allotted shares of National Securities Depository Ltd. in its initial public offering. This dragged the local unit to the day's low of 87.5375 a dollar. NSDL's offer opened for subscription on Jul. 30 and closed on Friday. The public offer was subscribed over 41 times as of the final day. The company received bids for 1.44 billion shares against 35.13 million shares on offer.
The Indian unit surged against the dollar at open on Monday as the dollar index dropped sharply after a weak US jobs data increased bets that the US Federal Reserve will cut rates at its September meeting. Traders are now seeing an 80% probability for a September rate cut by the Fed compared with 37.7?fore the US jobs data, according to CME Group's FedWatch tool. At 1225 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 98.76, against 98.69 Friday and 100.05 Thursday.
During the day, the rupee is seen moving in a range of 87.20 to 87.60 against the dollar. Dealers peg key technical resistance for the rupee at 87.10 a dollar and support at 87.60. (Pratiksha)
India Rupee: Fwd premium at 1-mo high as US ylds drop post weak US jobs data
| AT 1145 IST | AT 0900 IST | HIGH | LOW | PREVIOUS(AT 1530 IST) | |
| Spot rupee per $1 | 87.4875 | 87.2150 | 87.2000 | 87.5350 | 87.5400 |
| 1-year dlr/rupee fwd (paise) | 178.60 | 178.19 | 179.89 | 178.19 | 171.16 |
MUMBAI – The one-year dollar/rupee forward premium rose to just over a month's high Monday as US Treasury yields fell sharply after a weak US jobs report prompted market participants to increase bets of imminent US Federal Reserve rate cuts. "Forwards are tracking the US data. Rate cut seems to be likely now (in the US)," a dealer at a private-sector bank. "2.08-2.10% seems like good resistance (for the one-year forward premium)"
Data on Friday showed US employment growth undershot expectations in July while the non-farm payrolls count for the prior two months was revised down by a huge 258,000 jobs, suggesting a sharp deterioration in labour market conditions. Non-farm payrolls increased by 73,000 jobs last month after rising by a downwardly revised 14,000 in June, the fewest in nearly five years, the Labor Department's Bureau of Labor Statistics said. Economists polled by Reuters had forecast payrolls would increase by 110,000 jobs after rising by a previously reported 147,000 in June.
Traders are now betting on an 80% probability for a September rate cut by the Fed compared to 37.7?fore the US jobs data, according to CME Group's FedWatch tool. Forwards of a currency pair are reflective of the interest rate differential between the two countries.
The Fed held interest rates steady last week in the 4.25-4.50% range for the fifth consecutive meeting. With the Fed likely to go for a rate cut in September, and slim chances of a rate cut by the Reserve Bank of India for the rest of the year, the interest rate differential between the US and India may widen further, dealers said.
Further, most dealers said the Reserve Bank of India likely gave delivery of $5 billion on its dollar/rupee buy-sell swaps maturing on Monday, given the ample rupee liquidity in the banking system. This may have also boosted the forward premiums, they said. "They (RBI) have most likely given delivery of the swap but (it) seems like some small portion they may have rolled over as well," a dealer at another private-sector bank said.
At 1145 IST, the one-year exact period dollar/rupee forward premium was 2.04%, against Friday's close of 1.96%. On an absolute basis, the premium was at 178.60 paise, against 171.16 paise Friday. Premium touched a high of 2.06?rlier in the day. (Pratiksha)
India Rupee: Technical levels for rupee - Aug 4
MUMBAI – At 1030 IST, the rupee was at 87.3900 per dollar. At 0900 IST, the rupee was at 87.2150 a dollar, against the previous close of 87.5400. 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 | 87.60 | 87.50 | 87.10 | 86.80 |
| Brokerage firm | 87.80 | 87.59 | 87.05 | 86.90 |
| Brokerage firm | 87.50 | 87.45 | 87.00 | 86.95 |
(Pratiksha)
India Rupee: Surges as dollar index slumps post weak US jobs data, oil falls
| AT 0920 IST | AT 0900 IST | HIGH | LOW | PREVIOUS(AT 1530 IST) | |
| Spot rupee per $1 | 87.3000 | 87.2150 | 87.2000 | 87.3150 | 87.5400 |
MUMBAI - The rupee surged against the dollar Monday, in line with its Asian peers, as the dollar index dropped sharply after a weak US jobs data increased bets that the US Federal Reserve will cut rates at its September meeting, dealers said. "It is all due to the DXY (dollar index). (Fed) Rate cut expectations have been changing quickly, which is why we are seeing these large moves (in rupee)," a dealer at a private-sector bank said. "But I think this is all the rise (in rupee) we will see today."
Data on Friday showed US employment growth undershot expectations in July while the nonfarm payrolls count for the prior two months was revised down by a huge 258,000 jobs, suggesting a sharp deterioration in labour market conditions. Nonfarm payrolls increased by 73,000 jobs last month after rising by a downwardly revised 14,000 in June, the fewest in nearly five years, the Labor Department's Bureau of Labor Statistics said. Economists polled by Reuters had forecast payrolls would increase by 110,000 jobs after rising by a previously reported 147,000 in June.
Traders are now seeing an 87.5% probability for a September rate cut by the Fed compared with 37.7?fore the US jobs data, according to CME Group's FedWatch tool. After the sharp fall on Friday, the dollar index steadied in early trade Monday. At 0920 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 98.75, against 98.69 Friday and 100.05 Thursday.
A fall in crude oil prices also supported the Indian unit, dealers said. Oil prices declined Sunday after Organization of the Petroleum Exporting Countries and its allies decided to go for another large production hike in September. At 0920 IST, the October Brent crude contract on the Intercontinental Exchange was at $69.50 per barrel against $69.67 per barrel Friday and $72.53 per barrel Thursday.
A rise in other Asian currencies, tracking a fall in the dollar index, also boosted the Indian unit, according to dealers. Asian currencies gained 0.2.-1.1% against the greenback, with the Philippines peso being the best performer.
Meanwhile, some banks stepped in to purchase the greenback, likely on behalf of importers, who wanted to make the most of the relatively lower dollar/rupee levels, limiting gains for the Indian currency, dealers said. "I was expecting buying (for dollars) around these levels," a dealer at a state-owned bank said. "If the rupee breaks 87.10, then only we can see 86.80. I am expecting consolidation happening around 87.00-87.10 levels."
During the day, the rupee is seen moving in a range of 87.00 to 87.40 against the dollar. Dealers peg key technical resistance for the rupee at 87.10 a dollar. (Pratiksha)
India Rupee - Asia FX: Rise as dollar index falls after weak US jobs report
MUMBAI – Asian currencies rose against the dollar on Monday as the dollar index declined after a weak US jobs report prompted market participants to increase bets of imminent US Federal Reserve rate cuts.
Data on Friday showed US employment growth undershot expectations in July while the nonfarm payrolls count for the prior two months was revised down by a huge 258,000 jobs, suggesting a sharp deterioration in labour market conditions. Nonfarm payrolls increased by 73,000 jobs last month after rising by a downwardly revised 14,000 in June, the fewest in nearly five years, the Labor Department's Bureau of Labor Statistics said. Economists polled by Reuters had forecast payrolls would increase by 110,000 jobs after rising by a previously reported 147,000 in June.
Traders are now betting on an 87.5% probability for a September rate cut by the Fed compared to 37.7?fore the US jobs data, according to CME Group's FedWatch tool. After the report, US President Donald Trump said he ordered his team to fire the commissioner of the US Bureau of Labor Statistics, Erika L. McEntarfer, nominated by prior President Joe Biden for the role. This undermined investors' confidence in US economic data, further weighing on the dollar.
After the sharp fall on Friday, the dollar index steadied in early trade Monday. At 0845 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 98.73, against 98.69 Friday and 100.05 Thursday.
The Philippine peso jumped 1.1% against the dollar, the most amongst its peers while the Malaysian ringgit was up 1%. The Indonesian rupiah was up 0.8% against the dollar. Data released on Friday showed Indonesia's exports rose in June as exporters looked to beat the US tariff deadline and shipments of palm oil and gold jewellery rose. June shipments rose 11.29% on a yearly basis to $23.44 billion, higher than the 10.41% forecast by economists polled by Reuters. Exports rose 9.68% in May.
Both the South Korean won and the Taiwan dollar were up 0.4% against the dollar. The country's trade minister said on Friday that there is no written agreement yet on a trade deal between South Korea and the US. The US tariff on South Korean imports will be 15%, Trump said last week, down from a threatened 25%. Both the Thai baht and Chinese yuan were up 0.2% against the dollar. (Pratiksha)
India Rupee: Expected range for rupee - Aug 4
MUMBAI- Following are the expected support and resistance levels for the rupee on Monday, as forecast by leading banks and brokerages in an Informist poll:
| PARTICIPANT | SUPPORT | RESISTANCE |
| State-owned bank | 87.40 | 87.00 |
| Private sector bank | 87.60 | 87.10 |
| Private sector bank | 87.45 | 87.05 |
| Foreign bank | 87.50 | 86.80 |
| Brokerage firm |
87.30 |
87.00 |
| Brokerage firm | 87.50 | 87.00 |
| Brokerage firm | 87.30 | 87.10 |
(Pratiksha)
End
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Tanima Banerjee
For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.
Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.
Informist Media Tel +91 (11) 4220-1000
Send comments to feedback@informistmedia.com
© Informist Media Pvt. Ltd. 2025. All rights reserved.
To read more please subscribe
Share this Story:
