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Informist, Tuesday, Aug. 19, 2025

 

By Gowri Lakshmi

 

MUMBAI – The rupee surged above 87 per dollar and ended at a three-week high for the second consecutive day due to persistent foreign fund inflows and unwinding of long dollar bets by traders, dealers said. Improvement in investor sentiment after Prime Minister Narendra Modi proposed reforms in goods and services tax also supported the rupee, dealers said. 

 

"Stop-losses (on long dollar bets) were triggered at 87.20 (a dollar) itself, it was basically the positive sentiments from Russia-Ukraine peace talks and also as Fed (US Federal Reserve) is likely to cut rates in September," a currency trader at a broking firm said. "Moreover, the oil companies who had been buying are out of the market while FPIs (foreign portfolio investors) are now dollar sellers."

 

After rising to a high of 86.9175, the Indian unit settled at 86.9550 against the greenback. The Indian unit traded in a relatively wide range of 39 paise during the day. The Indian currency was the best performing currency amongst its regional peers, gaining almost 0.5% against the US unit.

 

Most other Asian currencies fell 0.1-0.3% against the greenback as the dollar index recovered slightly. The Indonesian rupiah was the worst hit. 

 

The rupee had opened the day higher against the dollar at 87.2500 as risk appetite amongst investors improved after Modi, on Friday, proposed GST reforms, dealers said. Modi said GST on regular-use items would be brought down to the lowest tax rate of 5%, which will lower prices of such goods and also help small businesses. The central government also proposed a simple tax structure with just two slabs--standard and merit--from the current four-rate structure of 5%, 12%, 18% and 28%.

 

"FPIs were the major sellers (of dollars) as sentiment has improved quite a bit," a dealer at a private-sector bank said. "I don't think anybody expected 87.00 to hit though."

 

Easing of tensions between the US and Russia and efforts at ceasefire in the ongoing Russia-Ukraine war also boosted investor sentiment, dealers said. US President Donald Trump and Russian Vladimir Putin met on Friday and Trump held talks with his Ukrainian counterpart Volodymyr Zelenskyy Monday. Zelenskyy said security guarantees for his country could be finalised within 10 days following talks with Trump and European leaders.

 

The outcome of the meeting between Trump and Zelenskyy pushed the dollar slightly up, which weighed on the rupee, dealers said. At 1530 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 97.96, against 98.13 Monday and 97.84 Thursday.

 

However, as soon as the rupee hit 87.20 a dollar due to foreign fund inflows, stop-losses on long dollar bets were triggered, dealers said. This further prompted a few traders to cut their long dollar positions, in anticipation of a sharp rise of the rupee and sustained weakness of the dollar in the near-term as most market participants are pricing in an interest cut by the US Federal Reserve at its September meeting. According to the CME FedWatch tool, traders now see 83.6% probability of a 25-basis-point cut in rates at the Fed's next meeting.

 

Noting the rupee's sharp and unexpected rise, exporters sold dollars to make the most out of relatively higher dollar/rupee levels as they expect the rupee to gain further in the near-term, dealers said. Despite rising above the psychologically crucial level of 87 per dollar, most importers remained on the sidelines, dealers said. "Below 86.90 (a dollar) is what most (importers) are looking for, we can expect good buying at that (dollar/rupee) level," the currency trader at the broking firm said.

 

	AT 1530 IST	AT 0900 IST	HIGH	LOW	PREVIOUS(AT 1530 IST)
Spot rupee per $1	86.9550	87.2500	86.9175	87.3050	87.3500
1-year dlr/rupee fwd (paise)	186.10	184.85	188.36	184.85	183.63

 

FORWARDS

The one-year dollar/rupee forward premium ended at an over three-month high as importers purchased dollars for forward delivery, noting the sharp appreciation of the rupee, dealers said. However, a few exporters sold forward dollars to take advantage of the relatively higher premium levels, which capped the rise, dealers said. The one-year dollar/rupee forward contract hit a high of 2.16% during the day, its highest level since May 16.

 

A fall in surplus liquidity in the banking system also supported the one-year dollar/rupee premium, dealers said. As per latest data, the Reserve Bank of India net absorbed INR 3.06 trillion from the banking system Monday, slightly lower than INR 3.12 trillion on Sunday.

 

Dealers said the next big trigger for forward premiums will likely be the outcome of the US Federal Open Market Committee Meeting in September. Forwards of a currency pair are reflective of the interest rate differential between the two countries. On Monday, the benchmark 10-year US Treasury yield rose 1 basis points to 4.34%. Market participants are keenly waiting for the Federal Reserve's Jackson Hole Symposium on Thu-Sat, where US Fed Chair Jerome Powell will speak on the economic outlook and the central bank's policy framework.

 

The one-year exact period dollar/rupee premium ended at 2.14%, up from its previous close of 2.10%. On an absolute basis, the premium was 186.10 paise, against 183.63 paise Monday.

 

OUTLOOK

On Wednesday, the rupee will take cues from the movement of the dollar index and crude oil prices, dealers said. They expect rupee to be supported by foreign fund inflows due to easing global geopolitical tensions and improvement in investors risk appetite. However, gains of the Indian unit are seen capped as importers may rush to purchase dollars to take advantage of the relatively lower dollar/rupee levels, dealers said.

 

They also expect dollar sales from exporters, who are wary of a further rise of the rupee and weakness of the US currency. This is likely to further boost the Indian unit, dealers said.

 

Traders will also watch out for any tariff or geopolitical-related news from the US, especially on the Ukraine-Russia war, dealers said.

 

During the day, the rupee is seen moving in a range of 86.80-87.30 against the dollar. Dealers peg key technical resistance for the Indian unit at 86.80 a dollar.

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India Rupee - World FX: Euro rises as investors assess Trump-Zelenskyy talks

 

	AT 1550 IST	HIGH	LOW	PREVIOUS
GBP/USD	1.2157	1.2168	1.2129	1.2145
EUR/USD	1.0182	1.0185	1.0154	1.0169
NZD/USD	0.6296	0.6299	0.6266	0.6270
AUD/USD	0.6965	0.6968	0.6935	0.6947
USD/JPY	134.1720	134.3130	133.4230	133.8330
USD/CAD	1.2847	1.2855	1.2835	1.2842
EUR/JPY	136.6130	136.6640	135.6480	136.0870
CHF/USD	1.0402	1.0414	1.0393	1.0410
EUR/CHF	0.9788	0.9789	0.9763	0.9766

 

MUMBAI- The euro rose 0.2% against the dollar as market participants assessed the outcome of talks Monday between US President Donald Trump and Ukraine's President Volodomyr Zelenskyy on the Russia-Ukraine war. Trump said the US would help to guarantee Ukraine's security in any deal to end Russia's war there, but the extent of any assistance was not immediately clear. Trump has also begun to arrange a trilateral meeting between Putin and Zelenskyy, which is a critical step in determining the course of action regarding the conflict, which is now in its fourth year.

 

The Japanese yen gained 0.6% against the dollar on growing expectations of the Bank of Japan hiking its key policy rate at its September policy meeting as inflation has remained well above its expected level for all the months this year. Japan's core CPI is expected to have climbed 3.0% in July from a year earlier, as per a poll by Reuters. Core inflation has now exceeded the Bank of Japan's 2% target for well over three years. This is paired with investors' expectations of a reduction in policy rate by the US Federal Reserve in September. 

 

The pound sterling surged 0.5% against the dollar after the meeting between Trump and Zelenskyy. The rise came ahead of the release of the UK's CPI data Wednesday. The country's headline CPI inflation for July is expected to have accelerated to 3.7%, as per analysts.

 

The dollar index edged slightly lower during European trade. Market participants are now focused on the Jackson Hole Symposium later this week, where Fed Chair Jerome Powell is due to speak on the economic outlook and the central bank's policy framework. Market participants will look for cues to the Fed's rate-cut plans in Powell's speech.

 

At 1554 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 98.04, against 98.13 Monday. The Australian dollar and the New Zealand dollar were broadly steady against the US currency.  (Rati Chaphekar)

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India Rupee: Fwd premium hits over-3-month high on importers' fwd dollar buys

 

	AT 1311 IST	AT 0900 IST	HIGH	LOW	PREVIOUS (AT 1530 IST)
Spot rupee per $1	87.1100	87.2500	87.0200	87.3050	87.3500
1-year dlr/rupee fwd (paise)	185.94	184.85	188.36	184.85	183.63

 

MUMBAI – The one-year dollar/rupee forward premium hit an over 3-month high as importers purchased dollars for forward delivery, noting the sharp appreciation in the rupee, dealers said. However, a few exporters sold forward dollars to take advantage of the relatively higher premium levels, which capped a further rise, dealers said. The one-year dollar/rupee forward contract hit a high of 2.16%, its highest level since May 16. 

 

"Rupee is appreciating due to improved sentiments and importers are panic buying in forwards, especially after Trump-Zelesnkyy talks came positive. Some exporters are receiving but importers are more in the market today (Tuesday)," a dealer at a private-sector bank said. 

 

US President Donald Trump and his Ukrainian counterpart Volodymyr Zelenskyy held talks on Monday and Trump said the US would help guarantee Kyiv's security in any deal to end the ongoing Russia-Ukraine war. Trump also expressed hope that Monday's summit could eventually lead to a trilateral meeting involving him and Russian President Vladimir Putin and Ukraine's Zelenskyy.

 

A fall in system liquidity also supported the one-year dollar/rupee premium, dealers said. As per latest RBI data, the central bank had net absorbed INR 3.06 trillion from the banking system Monday, slightly lower than INR 3.12 trillion on Sunday.

 

The benchmark 10-year US Treasury yields rose by 1 basis points on Monday to 4.34%. Market participants are keenly awaiting the Federal Reserve's Jackson Hole Symposium to be held Thu-Sat, where US Fed Chair Jerome Powell will speak on the economic outlook and the central bank's policy framework. Dealers said the next big trigger for forward premiums will likely be the outcome of the Federal Open Market Committee Meeting in September. Fed funds futures traders are now pricing in an 83.6% probability of a 25-basis-point cut in rates at the Fed's September meeting. 

 

"The one-month forward contract is seen falling because September is coming and you need to close books for half yearly," the dealer at the private-sector bank said. At 1330 IST, the one-year exact period dollar/rupee premium was 2.14%, up from its previous close of 2.10. On an absolute basis, the premium was 186.35 paise, against 183.63 paise Monday. Dealers see the one-year dollar/rupee levels in the range of 1.99%-2.20% in the near term.  (Gowri Lakshmi)

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India Rupee: Technical levels for rupee - Aug 19

 

MUMBAI – At 1105 IST, the rupee was at 87.2525 per dollar. At 0900 IST, the rupee was at 87.2500 a dollar, against the previous close of 87.3500. 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	88.00	87.70	87.15	86.80
Private-sector bank	87.70	87.40	87.10	87.00
Brokerage firm	87.70	87.50	87.20	87.00
Brokerage firm	88.20	88.00	87.00	86.50

 

(Pratiksha)

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India Rupee: Rises as investor risk appetite upbeat on likely GST reforms

 

	AT 0940 IST	AT 0900 IST	HIGH	LOW	PREVIOUS (AT 1530 IST)
Spot rupee per $1	87.2475	87.2500	87.1975	87.2500	87.3500

 

MUMBAI – The rupee rose against the dollar Tuesday because of improved risk sentiment among investors after Prime Minister Narendra Modi's announcement of reforms in the goods and services tax and the likely progress towards ending the Russia-Ukraine conflict, dealers said.  

 

"The improved risk sentiment is sustaining and we saw selling (of dollars) related to that in offshore," a dealer at a state-owned bank said. "But I think the rupee will stay range-bound through the day."

 

In his Independence Day speech, Modi Friday said GST on regular-use items would be brought down to the lowest tax rate of 5%, which will lower prices of such goods and also help small businesses. The Centre, on the very same day, also proposed moving towards a simple tax structure with just two slabs--standard and merit--from the current four-rate structure of 5%, 12%, 18% and 28%. 

 

Risk sentiment also got a boost after US President Donald Trump held talks with Ukraine President Volodymyr Zelenskyy on Monday to end Russia's war in Ukraine. Zelenskyy said security guarantees for his country could be finalised within 10 days following talks with Trump and European leaders.

 

"The rupee's recent rally reflects optimism around domestic reforms and equities, though external risks remain elevated," Amit Pabari, managing director at CR Forex, said in a note. "In the near term, resistance (for dollar/rupee) is placed at 87.50, while immediate support lies at 87.30."

 

Meanwhile, the dollar index rose after Trump's meeting with Zelenskyy, weighing on the Indian currency, dealers said. At 0940 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 98.22, against 98.13 Monday and 97.84 Friday.

 

Further, some banks bought the greenback on behalf of importers, looking to take advantage of the relatively lower dollar/rupee levels, which cappped gains in the local unit, according to dealers. 

 

During the day, the rupee is seen moving in a range of 87.10 and 87.50 against the greenback. Dealers peg key technical resistance for the domestic currency at 87.20 a dollar.  (Pratiksha)

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India Rupee - Asia FX: Most down as dlr index up post Trump-Zelenskyy talks

 

MUMBAI – Most Asian currencies fell against the dollar Tuesday as the dollar index rose after US President Donald Trump and Ukraine President Volodymyr Zelenskyy Monday held talks on ending Russia's war in Ukraine.

 

While Trump said the US would help guarantee Ukraine's security in any deal to end Russia's war there, the extent of any assistance was not immediately clear, reports said. He also expressed hope that Monday's summit could eventually lead to a trilateral meeting involving him and Russian President Vladimir Putin and Ukraine's Zelenskyy, and added that he believes Putin wants the war to end.

 

The dollar index was also supported by reduced bets of a rate cut by the Federal Reserve in September after the recent solid economic data in the world's largest economy. Fed funds futures traders are now pricing in an 83.6% probability of a 25-basis-point cut at the Fed's September meeting, compared to 98% last week, according to the CME Group's FedWatch Tool. At 0915 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 98.22, against 98.13 Monday and 97.84 Friday.

 

The Indonesian rupiah fell 0.2% against the dollar, the most amongst its peers, ahead of the policy outcome of Bank Indonesia, due Wednesday. Bank Indonesia is expected to pause its easing cycle on Wednesday, according to a Reuters poll. The Phillipine peso also fell 0.2%. 

 

The Malaysian ringgit and the Taiwan dollar fell 0.1?ch. In response to Trump saying Chinese President Xi Jinping told him that he will not invade the island while Trump is in office, Beijing's foreign ministry said on Monday that Taiwan is an internal matter for China. The Chinese yuan and the Thai baht were flat against the greenback.  (Pratiksha)

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India Rupee: Expected range for rupee - Aug 19

 

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: 

 

PARTICIPANT	SUPPORT	RESISTANCE
Private-sector bank	87.55	87.25
Brokerage firm	87.60	87.20
Brokerage firm	87.50	87.00
Brokerage firm	87.55	87.15

 

 

 

 

 

 

(Pratiksha)

 

End

 

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

 

Edited by Ashish Shirke

 

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