More Stories

Informist, Wednesday, Aug. 20, 2025

 

By Pratiksha

 

MUMBAI – The rupee ended lower against the dollar Wednesday but still erased a considerable portion of its losses as foreign banks continuously sold the greenback on behalf of foreign portfolio investors and some traders trimmed their long dollar bets, dealers said. 

 

"After today's move, I see the rupee rising to 86.50 (a dollar) in the coming days," a dealer at a private-sector bank said. "FPIs have turned (dollar) sellers. The overall sentiment in the market seems to have turned positive."

 

After hitting a low of 87.1650 a dollar, the Indian unit settled at 87.0650, against 86.9550 Tuesday. The rupee traded in a range of 19 paise during the day.

 

The local currency began the day on a negative note, opening 20 paise lower against the dollar, as the dollar index rose ahead of the US Federal Reserve's Jackson Hole Economic Policy Symposium later in the week, dealers said. The Jackson Hole symposium, to be held Thursday-Saturday, will be watched especially for Fed Chair Jerome Powell's speech on the economic outlook and the central bank's policy framework. Powell is scheduled to speak Friday.

 

Traders, who have almost completely priced in a rate cut at the Fed's September meeting, will see if Powell's comments push back against the same. Fed funds futures traders are now pricing in an 82.9% probability of a 25 basis-point cut in September, according to the CME Group's FedWatch Tool.

 

At 1530 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 98.27, against 98.28 Tuesday and 98.13 Monday. The index rose to a high of 98.44 during the day.

 

However, shortly after the market opened, the rupee erased some of its losses as foreign and private-sector banks stepped in to sell the greenback on behalf of FPIs looking to invest in the domestic stock market. Foreign inflows into India have revived a little in the past few days owing to improved risk sentiment after the announcement of likely reforms in the goods and services tax system and S&P upgrading India's credit rating to "BBB". However, market participants are not too optimistic of the sustainability of the inflows amidst the US tariff uncertainty.

 

"I don't think these inflows are too meaningful. There is still a chance that the rupee remains below the 87 figure," a dealer at a state-owned bank said. US Treasury Secretary Scott Bessent Tuesday accused India of "profiteering" from its sharply increased purchases of Russian oil during the war in Ukraine, saying Washington viewed the situation as unacceptable.

 

However, banks continuously bought the greenback on behalf of oil marketing companies and other importers for fear of the rupee depreciating further in the coming days. These purchases weighed on the Indian currency and the rupee traded in the range of 87.00-87.10 a dollar for most of the day.

 

"There is considerable demand (for dollars) in the market, which is why the close did not happen above 87," a dealer at a private-sector bank said. "I think the buy-on-dips (in dollar/rupee) theme will continue."

 

However, the rupee moved above the 87-per-dollar mark briefly in the final leg of the day's trade as some banks heavily sold dollars to trim their long dollar positions in the offshore non-deliverable forwards market, dealers said. However, constant demand for dollars from importers ensured it did not hold at that level and closed at 87.0650, dealers said.

 

	AT 1530 IST	AT 0900 IST	HIGH	LOW	PREVIOUS (AT 1530 IST)
Spot rupee per $1	87.0650	87.1550	86.9800	87.1650	86.9550
1-year dlr/rupee fwd (paise)	188.30	188.55	189.44	187.66	186.10

 

FORWARDS

The one-year dollar/rupee forward premium ended at its highest level in over three months, tracking a fall in US Treasury yields, as importers bought dollars for forward delivery, dealers said. However, forward dollar sales by banks, noting the higher levels, capped the gain in premiums, they said. The one-year forward premium touched a high of 2.16?rlier in the day. 

 

"The premiums were generally stable to slightly higher due to paying by importers, lower spot and higher 10-year yields," Anil Kumar Bhansali, head of treasury and executive director at Finrex Treasury Advisors LLP, said in a note.

 

US Treasury yields fell ahead of the release Wednesday of the US Federal Open Market Committee's July meeting minutes, especially because two governors had dissented to the panel's decision of a status quo on rates. The 10-year US bond yield fell to 4.30% Tuesday against 4.34% Monday. Forwards of a currency pair are reflective of the interest rate differential between two countries.

 

Market participants now await the Fed's Jackson Hole symposium, to be held Thu-Sat, and especially for Fed Chair Jerome Powell's speech Friday on the economic outlook and the central bank's policy framework. "The US rate cut view can change considerably if Powell goes for a dovish tone, so people are waiting to see what happens there," a dealer at a private-sector bank said. 

 

Further, some banks bought dollars for forward delivery, noting a sharp depreciation in the Indian unit at the open, as they expected the rupee to depreciate further in the near term owing to uncertainty related to US tariffs.

 

At 1530 IST, the one-year exact period dollar/rupee premium was 2.15%, against its previous close of 2.14%. On an absolute basis, the premium was 188.30 paise, against 186.10 paise Tuesday. Dealers see the one-year forward premium in the range of 2.05-2.20% in the near term.

 

OUTLOOK

On Thursday, the rupee will take cues from movement in the dollar index ahead of the Jackson Hole symposium, dealers said. Market participants may exercise caution ahead of the key event.

 

Likely foreign portfolio inflows into Indian markets owing to improved risk sentiment may provide some comfort to the Indian currency, dealers said. However, they were unsure if markets would continue to attract substantial foreign inflows in the near term amid the ongoing uncertainty on US tariffs.

 

Dealers expect banks to continue buying dollars on behalf of importers around the current levels in expectation that the local unit may depreciate further going ahead, in turn weighing down the rupee. "I think the rupee will consolidate around the 87.00-87.20 zone for some time, and after that, if a breakout happens from 87.20, we will see 88.20 kind of levels," a dealer at a private-sector bank said. 

 

Traders will continue to be watchful of further developments on the US tariff front and the Russia-Ukraine-US talks. "Technically, the rupee continues to face strong resistance near 86.80 levels, while immediate support lies in the 87.60–87.80 zone, suggesting a range-bound bias until fresh triggers emerge," Jateen Trivedi, vice-president, commodity and currency research, at LKP Securities, said in a note.

 

During the day, the rupee is seen moving in the range of 86.90-87.30 against the dollar. Dealers peg key technical support for the Indian unit at 87.30 a dollar.

---

India Rupee - World FX: New Zealand dollar slumps after central bank cuts rates

 

	AT 1500 IST	HIGH	LOW	PREVIOUS
GBP/USD	1.3501	1.3510	1.3462	1.3482
EUR/USD	1.1638	1.1651	1.1622	1.1644
NZD/USD	0.5830	0.5898	0.5815	0.5890
AUD/USD	0.6436	0.6455	0.6426	0.6452
USD/JPY	147.5160	147.8150	147.1390	147.5570
USD/CAD	1.3876	1.3883	1.3863	1.3862
EUR/JPY	171.6860	172.0400	171.1200	171.8160
CHF/USD	1.2376	1.2387	1.2356	1.2369
EUR/CHF	0.9402	0.9414	0.9395	0.9405

 

MUMBAI - The New Zealand dollar dropped sharply by 1.2% as the central bank cut its official cash rate by 25 basis points to 3% Wednesday, and signalled further easing owing to risks to growth. The rate cut comes in the backdrop of the country's annual inflation rate being at 2.7%, around the top end of its 1-3% inflation target. The Australian dollar fell 0.3% against the dollar, tracking losses in the New Zealand currency. 

 

The Japanese yen fell nearly 0.1% against the greenback after Japan's data showed the country's exports dropped 2.6% on year in July, posting its steepest drop in four years. The fall in exports was sharper than the 2.1% contraction forecast in a Reuters poll and compared with a 0.5?cline in June. Imports into Japan declined 7.5%, less than the 10.4?ll expected.

 

The pound sterling rose 0.1% against the dollar after data showed that UK inflation was at 3.8% in July, against 3.6% from last month. The increase in inflation led to expectations of no more rate cuts by the Bank of England in the near future. The central bank has cut rates five times in the last 12 months. 

 

The euro rose 0.1% against the dollar as investors assessed the outcome of talks Monday between US President Donald Trump and Ukraine's President Volodomyr Zelenskyy on the Russia-Ukraine war. Trump has 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 dollar index rose Wednesday as market participants await the Jackson Hole symposium, to be held Thu-Sat, as Fed Chair Jerome Powell is due to speak on the economic outlook and the central bank's policy framework on Friday. Traders will focus on what Powell says about the near-term outlook for US rates, as they have almost fully priced in a rate cut next month. Market participants also await minutes of the US Fed'S July meeting, due Wednesday, especially since two governors of the committee dissented against the panel's decision of status quo on rates. 

 

At 1500 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 98.31, against 98.28 Tuesday and 98.13 Monday.  (Rati Chaphekar)

---

India Rupee: Premium comes off 3-month high as banks sell fwd dollars at high levels

 

	AT 1320 IST	AT 0900 IST	HIGH	LOW	PREVIOUS (AT 1530 IST)
Spot rupee per $1	87.0775	87.1550	86.9900	87.1650	86.9550
1-year dlr/rupee fwd (paise)	187.66	188.55	189.44	187.66	186.10

 

MUMBAI – The one-year dollar/rupee forward premium came off the over-three-month high it hit earlier in the day as banks stepped in to sell dollars for forward delivery, noting the relatively higher levels, dealers said. The one-year forward premium touched a high of 2.16?rlier in the day. "There were some bids in the morning tracking US, but after that some profit booking happened," a dealer at a private-sector bank said. 

 

The one-year forward premium rose tracking an overnight fall in the US Treasury yields, according to dealers. US Treasury yields fell ahead of minutes of the US FOMC's July meeting, due Wednesday, especially since two governors of the committee dissented against the panel's decision of a status quo on rates.

 

The 10-year US bond yield fell to 4.30% Tuesday against 4.34% Monday. Forwards of a currency pair are reflective of the interest rate differential between two countries. Marker participants now await the Federal Reserve's Jackson Hole symposium, to be held Thu-Sat, and especially Fed Chair Jerome Powell's speech on the economic outlook and the central bank's policy framework on Friday. "There is not a lot happening on the forwards front. It may start moving once Powell's speech is done and people have some idea about the US rate cuts," a dealer at a state-owed bank said. 

 

Further, some banks bought the US unit for forward delivery, noting a sharp depreciation in the Indian unit at the open, as they expected it to depreciate further in the near term owing to uncertainty related to US tariffs. The rupee opened 20 paise lower at 87.1550 a dollar in the domestic spot market on Wednesday. 

 

At 1320 IST, the one-year exact period dollar/rupee premium was 2.14%, unchanged from its previous close. On an absolute basis, the premium was 187.66 paise, against 186.10 paise Tuesday. Dealers see the one-year forward premium in the range of 2.05-2.20% in the near term.  (Pratiksha)

---

India Rupee: Remains sharply down as importers buy dollars; FPI inflows aid

 

	AT 1213 IST	AT 0900 IST	HIGH	LOW	PREVIOUS (AT 1530 IST)
Spot rupee per $1	87.1050	87.1550	86.9900	87.1650	86.9550

 

MUMBAI – The rupee remained sharply lower against the dollar Wednesday as banks bought the greenback on behalf of oil marketing companies and other importers, dealers said. However, foreign portfolio inflows into domestic equities limited losses for the local unit, they said. The Indian currency has moved in a range of 17 paise so far in the day. 

 

"The rupee has been range bound. There has been both selling (of dollars) and buying (of dollars) pressure," a dealer at a state-owned bank said. "But I think if buying keeps coming in, we may see 87.20 (a dollar) breaking."

 

Dealers said importers bought the greenback, likely on expectation that the Indian currency may depreciate further in the near term, given the uncertainty related to US tariffs. US Treasury Secretary Scott Bessent Tuesday accused India of profiteering from its sharply increased purchases of Russian crude oil during the war in Ukraine, saying Washington viewed the situation as unacceptable.

 

Meanwhile, shortly after the market opened, foreign and private sector banks stepped in to sell the greenback on behalf of foreign portfolio investors looking to invest in the domestic stock market, which supported the Indian unit, dealers said. The Indian currency touched the day's high of 86.9900 a dollar earlier in the day. 

 

Foreign inflows into India have somewhat revived in the last few days owing to improved risk sentiment after announcement of likely reforms in the Goods and Services Tax system and S&P upgrading India's credit rating to 'BBB'. However, market participants are not too optimistic on the sustainability of the inflows amidst the US tariff uncertainty. "The inflows in the market are not too heavy. They are steady. Until and unless there is clarity on the overall tariff scenario, we may not see concrete flows," a dealer at another state-owned bank said. 

 

During the day, the rupee is seen moving in a range of 86.90 and 87.30 against the greenback. Dealers peg key technical support for the domestic currency at 87.30 a dollar.  (Pratiksha)

---

India Rupee: Technical levels for rupee - Aug 20

 

MUMBAI – At 1025 IST, the rupee was at 87.0675 per dollar. At 0900 IST, the rupee was at 87.1550 a dollar, against the previous close of 86.9550. Following are the key support and resistance levels for the rupee as provided by leading banks and brokerages:

 

Participants	S2	S1	R1	R2
State-owned bank	87.50	87.20	86.85	86.70
Brokerage firm	87.50	87.20	86.80	86.50
Brokerage firm	88.00	87.60	86.80	86.50
Brokerage firm	87.50	87.25	86.80	86.50

 

(Pratiksha)

---

India Rupee: Falls sharply as dollar index rises before Jackson Hole meeting

 

	AT 0933 IST	AT 0900 IST	HIGH	LOW	PREVIOUS (AT 1530 IST)
Spot rupee per $1	87.1250	87.1550	87.0875	87.1650	86.9550

 

MUMBAI – The rupee fell sharply against the dollar Wednesday as the dollar index gained ahead of the Federal Reserve's Jackson Hole Economic Policy Symposium later this week, dealers said. The Jackson Hole symposium, to be held Thursday-Saturday, will be watched out for, especially Fed Chair Jerome Powell's speech on the economic outlook and the central bank's policy framework on Friday. Traders, who have almost completely priced in a rate cut at Fed's September meeting, will see if Powell's comments push back against the same.  

 

Fed funds futures traders are now pricing in an 84.9% probability of a 25 bps cut at the Fed's September meeting, according to the CME Group's FedWatch Tool. At 0933 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 98.34, against 98.28 Tuesday and 98.13 Monday.

 

Further, US Treasury Secretary Scott Bessent on Tuesday accused India of profiteering from its sharply increased purchases of Russian oil during the war in Ukraine, saying Washington viewed the situation as unacceptable. This weighed on market participants' expectations of some reprieve on the 50% US tariffs on India before the Aug. 27 deadline. "Overnight, Scott Bessent comments on India reignited the risk of additional tariff, leading to gap-up opening in USDINR (dollar-rupee) pair. The preferred trade remains to sell this rally for retest of 86.80 (a dollar) area," a dealer at a private sector bank said. 

 

Meanwhile, some banks sold the greenback, likely for foreign fund inflows, which helped the Indian currency erase some of its losses, dealers said. "The rupee is moving two ways right now. It is very tough to bet which side it will go," a dealer at a state-owned bank said. "I am expecting it will hold below 87 levels and then remain range bound for the day."

 

Market participants also await minutes of the US Fed'S July meeting, due Wednesday, especially since two governors of the committee dissented against the panel's decision of status quo on rates. During the day, the rupee is seen moving in a range of 86.90 and 87.30 against the greenback. Dealers peg key technical support for the domestic currency at 87.30 a dollar.  (Pratiksha)

---

India Rupee - Asia FX: Most down as dollar index up before Jackson Hole meet

 

MUMBAI – Most Asian currencies fell against the dollar Wednesday as the dollar index rose ahead of the Federal Reserve's Jackson Hole Economic Policy Symposium this week. Market participants keenly await the event, to be held Thursday-Saturday, as Federal Reserve Chairperson Jerome Powell is due to speak on the economic outlook and the central bank's policy framework on Friday. Powell's comments about the near-term outlook for US rates will be closely monitored. 

 

Fed funds futures traders are now pricing in an 84.9% probability of a 25-basis-point cut at the Fed's September meeting, according to the CME Group's FedWatch Tool. At 0855 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 98.42, against 98.28 Tuesday and 98.13 Monday. Market participants also await minutes of the US Fed's July meeting, due Wednesday, especially since two governors of the committee dissented against the panel's decision of status quo on rates. 

 

The South Korean won was the worst hit amongst its peers, falling 0.6% against the dollar. US Commerce Secretary Howard Lutnick said Tuesday that the government plans to release official documents on recent trade deals with Japan and South Korea in the next few weeks, reports said.   

 

The Taiwan dollar fell 0.5% against the dollar while the Indonesian rupiah fell 0.3% ahead of the policy outcome of Bank Indonesia, due later in the day. Bank Indonesia is expected to pause its easing cycle, according to a Reuters poll. The Philippine peso was down 0.1% against the greenback. 

 

Bucking the trend, the Thai baht and Chinese yuan were steady against the greenback. China left its benchmark lending rates unchanged for the third consecutive month on Wednesday, in line with market expectations. Authorities hinted that they are in no rush to deliver monetary stimulus despite a string of recent disappointing economic data.  (Pratiksha)

---

India Rupee: Expected range for rupee - Aug 20

 

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
State-owned bank	87.20	86.90
Private-sector bank	87.25	86.90
Private-sector bank	87.35	86.95
Foreign bank	87.40	86.80
Brokerage firm	87.29	86.99
Brokerage firm	87.30	86.80

 

 

 

 

 

 

 

 

 

 

(Pratiksha)

 

End

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

 

Edited by Rajeev Pai

 

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 (22) 6985-4000 

Send comments to feedback@informistmedia.com

 

© Informist Media Pvt. Ltd. 2025. All rights reserved.