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Informist, Wednesday, Sept. 3, 2025

By Pratiksha

NEW DELHI – Notwithstanding the persistent dollar purchases from importers, the rupee ended higher against the dollar on Wednesday as the Reserve Bank of India likely intervened to support the currency, dealers said. An easing dollar index also aided the Indian unit, they said. 

"88.20 (a dollar) seems to be RBI's level now," a dealer at a private-sector bank said. "There were some offers around 88.19 and after that, it was just one-sided move for rupee."

After hitting a low of 88.1900 during the day, the rupee ended at 88.0700 a dollar on Wednesday against 88.1550 on Tuesday. Most Asian currencies gained 0.1-0.4% against the dollar, with the South Korean won being the best performer.  

The rupee opened flat against the dollar but touched the day's high of 87.9800 shortly afterwards as some state-owned banks sold the greenback, likely for foreign fund inflows into an Indian corporate, dealers said.

However, gains in the Indian unit ran into dollar demand from oil marketing companies and other importers, who wanted to make the most of the relatively lower dollar/rupee levels, dealers said. Thus, gradually, the rupee hit the day's low of 88.1900 a dollar.

"I think the depreciation pressure will continue this month, unless there is something good happening on tariffs," a dealer at public-sector bank said. "We saw persistent demand (for dollars) from oilers at dips (in dollar/rupee)."

However, state-owned banks stepped in to sell dollars, likely on behalf of the central bank at around 88.19, which prevented the Indian unit from falling further, dealers said. Dealers pointed out that the rupee was well-supported around 88.20 on Tuesday as well. However, they added that the central bank was only present in the market in a "mild" manner. 

Some dealers said that noting the RBI's recent interventions, some traders trimmed their long dollar bets, which also provided support to the Indian unit. "RBI was not a lot there. But that hangover sort of led to selling (of dollars). Market was still long (on dollars) and getting out on upticks (in dollar/rupee)," a dealer at a foreign bank said.

Further, the dollar index eased during European trade ahead of multiple key economic data in the US this week, which also supported the Indian currency, according to dealers. At 1530 IST, the dollar index, which measures the strength in the dollar against a basket of six major currencies, was at 98.21, against 98.30 Tuesday and 97.69 Monday. The index had risen to 98.64 earlier in the day. 

A rise in domestic equities also supported the local unit, according to some dealers. The Nifty 50 and Sensex closed 0.5% and 0.6% higher, respectively. 

FORWARDS

The one-year dollar/rupee forward premium ended largely steady as market participants avoided placing large bets ahead of multiple economic data in the US this week, dealers said. 

Market participants await key US economic data for further cues on the Federal Reserve's rate trajectory. Job openings data for July is due Wednesday, August services purchasing managers' index is due Thursday, and the non-farm payrolls report is due Friday. Fed funds futures traders now see an 89.6% probability of the US central bank lowering interest rates by 25 basis points this month, according to the CME FedWatch tool.

The Institute for Supply Management on Tuesday announced that its Manufacturing Purchasing Managers Index for the US was 48.7 in August, up from 48.0 in July. A PMI reading below 50 indicates contraction in manufacturing, which accounts for 10.2% of the economy. Economists polled by Reuters had forecast the PMI would rise to 49.0.

A rise in US Treasury yields ahead of the key economic data weighed on the premiums, dealers said. Forwards of a currency pair are reflective of the interest rate differential between the two countries. Meanwhile, some banks sold dollars for forward delivery to take advantage of the relatively higher levels, which also weighed on premiums, some dealers said. The one-year dollar/rupee forward premium has jumped over 20 bps since last month.

Dealers see 2.25% as a key technical support for the one-year forward premium in the near term. At 1530 IST, the one-year exact period dollar/rupee premium was 2.21%, unchanged from the previous close. On an absolute basis, the premium was 194.65 paise, against 194.82 paise Tuesday.

OUTLOOK

On Thursday, the rupee will take cues from movement in the dollar index after the US job openings data, dealers said. "If the data points from US come in hotter than expected, we may see some strength in the dollar index," a dealer at a brokerage firm said. "This will only push rupee closer to 88.30 and beyond."

The Indian unit may open higher if traders continue to trim long dollar bets in the offshore non-deliverable forwards market, noting the RBI's recent intervention. Market participants will keep a close eye on developments related to the India-US trade deal talks.

Importers may continue to buy dollars due to expectation that the Indian unit may depreciate in near-term amid worries related to US tariffs on India, which may keep the downward pressure on the rupee intact, dealers said.

Meanwhile, most market participants may refrain from placing large bets ahead of the key US non-farm payrolls data on Friday and due to a holiday-shortened week, dealers said. The currency market is closed on Friday for Id-e-Milad. 

Most dealers expect the central bank to intervene through dollar sales in case the rupee moves toward the 88.20-88.30 levels. During the day, the rupee may move in a range of 87.90 and 88.30 against the dollar. Dealers peg key technical support for the rupee at 88.30 a dollar and resistance at 87.80. 

India Rupee - World FX: Yen down on political uncertainty; pound sterling up

MUMBAI – The Japanese yen fell 0.3% against the dollar Wednesday due to rising uncertainty over Prime Minster Shigeru Ishiba's political future. The concerns came to the forefront after the Japanese ruling party's Secretary General Hiroshi Moriyama, a close aide of Ishiba, Tuesday said he intends to resign from his post, potentially affecting the fate of Ishiba who has resisted calls to quit over an election loss.

The pound sterling rose 0.1% against the greenback, erasing earlier losses. UK Finance Minister Rachel Reeves Wednesday said she would deliver her annual budget on Nov. 26, with a focus on keeping a "tight grip" on public spending to help lower inflation and borrowing costs. The pound sterling had tumbled Tuesday on growing worries around government finances.

The euro rose 0.1% against the dollar even after data released Wednesday showed HCOB Eurozone Composite Purchasing Managers' Index inched up to 51.0 in August from 50.9 in July, marking a 12-month high but still indicating only modest growth. The 50.0 threshold separates growth from contraction. Data released Tuesday showed euro area inflation rose to 2.1% in August from 2.0% in July, just above expectations of 2.0% in a Reuters poll. The core inflation held steady at 2.3%, against expectations of a fall to 2.2%.

Australia's economy grew at the fastest annual pace in almost two years in the Apr-Jun quarter, data released Wednesday showed, leading to country's currency rising 0.1% against the greenback. The real GDP rose 0.6% in Apr-Jun, topping market forecasts of a 0.5% rise, and compared with a rise of 0.3% in the Jan-Mar. The New Zealand dollar, however, fell 0.1% against the US currency.

The dollar index was steady ahead of key US economic data this week. Job openings data for July is due on Wednesday and non-farm payrolls report is due Friday. At 1515 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 98.23, against 98.30 Tuesday and 97.69 Monday. (Rati Chaphekar)

India Rupee: Forward premium largely steady on caution before US econ data

NEW DELHI – The one-year dollar/rupee forward premium was largely steady as market participants avoided placing large bets ahead of multiple economic data in the US this week, dealers said. "There is not much movement in forwards. Some profit booking was there but broadly it's just there," a dealer at a state-owned bank said. "After the US data we will be able to tell clearly if 2.25% level will break or not. Right now, it is a good support."

Market participants await key US economic data for further cues on the Federal Reserve's rate trajectory. Job openings data for July is due Wednesday, August services purchasing managers' index is due Thursday, and the non-farm payrolls report is due Friday. Fed funds futures traders now see an 89.6% probability of the US central bank lowering interest rates by 25 basis points this month, according to the CME FedWatch tool.

The Institute for Supply Management on Tuesday announced that its Manufacturing Purchasing Managers Index for US was 48.7 in August, up from 48.0 in July. A PMI reading below 50 indicates contraction in manufacturing, which accounts for 10.2% of the economy. Economists polled by Reuters had forecast the PMI would rise to 49.0.

A rise in US Treasury yields ahead of the key economic data weighed on the premiums, dealers said. Forwards of a currency pair are reflective of the interest rate differential between the two countries.

Meanwhile, some banks sold dollars for forward delivery to take advantage of the relatively higher levels, which also weighed on premiums, some dealers said. The one-year dollar/rupee forward premium has jumped over 20 bps since last month.

Dealers see 2.25% as a key technical support for the one-year forward premium in the near term. At 1350 IST, the one-year exact period dollar/rupee premium was 2.21%, unchanged from the previous close. On an absolute basis, the premium was 194.65 paise, against 194.82 paise Tuesday. (Pratiksha)

India Rupee: Gives up all gains on importers' dlr buys, rise in dollar index

NEW DELHI – The rupee gave up all of its earlier gains against the dollar as banks bought dollars on behalf of importers, noting relatively lower dollar/rupee levels, dealers said. The Indian currency had risen to 87.9800 a dollar earlier Wednesday.

"Initially, there was some selling (of dollars) in the market but now buying (of dollars) on dips (in dollar/rupee) is continuing," a dealer at a state-owned bank said. "The depreciation bias on the rupee has not gone anywhere. We will continue to see such buying."

Most dealers have pegged key technical support for the currency at 88.30 a dollar and expect the Reserve Bank of India to step in through dollar sales if the Indian unit tests the key level. "I think 88.30 will be a hard stop. We have seen RBI presence there before," a dealer at a private-sector bank said. "If 88.30 breaks, the next stop will be 88.50."

Further, a rise in dollar index also weighed on the Indian currency, some dealers said. The dollar index rose tracking a fall in the pound sterling and the Japanese yen. At 1300 IST, the dollar index, which measures the strength in the dollar against a basket of six major currencies, was at 98.60, against 98.30 Tuesday and 97.69 Monday.

The Indian unit rose earlier Wednesday as state-owned banks sold the greenback, likely for foreign fund inflows into an Indian corporate, dealers said. Market participants now await key US economic data due this week for further cues on the Federal Reserve's rate trajectory. The US July job openings data is due Wednesday, while the non-farm payrolls report is due Friday. For the rest of the day, the rupee is seen moving in a range of 87.90-88.30 against the greenback. (Pratiksha)

India Rupee: Technical levels for rupee - Sept 3

NEW DELHI – At 1055 IST, the rupee was at 88.0200 per dollar. At 0900 IST, the rupee was at 88.1550 a dollar, unchanged from its previous close. Following are the key support and resistance levels for the rupee as provided by leading banks and brokerages:

(Pratiksha)

India Rupee: Up on dollar sales for FX inflows; rise in dollar index weighs

NEW DELHI – The rupee rose against the dollar Wednesday as state-owned banks sold the greenback, likely for foreign fund inflows into an Indian corporate, dealers said. The Indian currency opened flat at 88.1550 a dollar and rose to a high of 87.9800 shortly after. 

"Nats (nationalised banks) are on offer. We are seeing some flows, otherwise there is no reason why we are seeing such a move," a dealer at a private-sector bank said. "On the downside, I think 88.30 should hold."

Once the impact of the inflows materialises fully, most dealers expect the rupee to come under downward pressure, as importers may step in to buy dollars, noting relatively lower dollar/rupee levels. 

"Stalled trade negotiations with the US and heightened political uncertainty in major global economies are likely to keep risks skewed toward further weakness," Amit Pabari, managing director at CR Forex, said in a note. US President Donald Trump late Tuesday said he was not looking at lowering tariffs on India, Bloomberg reported.

Meanwhile, a rise in the dollar index, after a slump in the pound sterling and yen on Tuesday, weighed on the local currency, dealers said. At 0955 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 98.48, against 98.30 Tuesday and 97.69 Monday.

Market participants now await key US economic data due this week for further cues on the Federal Reserve's rate trajectory. The US July job openings data is due Wednesday, while the non-farm payrolls report is due Friday.

For the rest of the day, the rupee is seen moving in a range of 87.90-88.30 against the greenback. Dealers peg key technical resistance for the rupee at 87.80 a dollar.(Pratiksha) 

India Rupee - Asia FX: Mixed before US econ data; South Korean won rises

MUMBAI – Asian currencies moved on a mixed note against the dollar Wednesday as market participants await key US economic data this week for further cues on the Federal Reserve's rate trajectory. The US July job openings data is due on Wednesday, while the non-farm payrolls report is due Friday.

Fed funds futures traders now see a 91.7% probability of the Fed lowering interest rates by 25 basis points this month, according to the CME FedWatch tool. At 0915 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 98.49, against 98.30 Tuesday and 97.69 Monday.

The Institute for Supply Management announced on Tuesday that its Manufacturing Purchasing Managers Index for US was at 48.7 in August, up from 48 in July. A PMI reading below 50 indicates contraction in manufacturing, which accounts for 10.2% of the economy. Economists polled by Reuters had forecast the PMI would rise to 49.0.

The South Korean won rose 0.1% against the dollar Wednesday after data showed South Korea's GDP grew 0.7% in Apr-Jun, faster than the earlier estimate of 0.6%. It was the fastest quarterly growth since Jan-Mar 2024, when the economy grew 1.2%. The country's GDP had contracted 0.1% in Jan-Mar. The Philippine peso fell 0.1% against the greenback. 

The Indonesian rupiah fell 0.1% against the greenback, stablising after slumping over 1% last week due to Bank Indonesia's intervenention in the currency market. The rupiah came under sharp pressure amid nationwide protests. Protests have continued this week, with police firing tear gas at crowds near two universities in Bandung, about 140 km west of Jakarta. Indonesia's central bank has been guiding the rupiah to a stronger level and will try to get it to trade around 16,300 a dollar, Bank Indonesia Governor Perry Warjiyo said on Tuesday. 

"Assuming the political situation does not escalate sharply, we maintain our outlook for GDP growth of 4.8% this year and next, and the rupiah to strengthen to 16,140 against the US dollar by end-year, supported by a softer US dollar backdrop," MUFG Bank said in a report.

The Taiwan dollar fell 0.1% against the dollar and the Chinese yuan traded steady. The Malaysian ringgit traded broadly steady against dollar ahead of Bank Negara Malaysia's monetary policy committee meeting Thursday, when it is expected to maintain the overnight policy rate at 2.75%.

The Thai baht fell 0.1% amid ongoing political instabilities in the country. On Wednesday, the ruling Pheu Thai party said it had sought royal approval to dissolve the parliament for a new election. This was right after the opposition People's Party, which controls nearly a third of lower house seats, said it was supporting the rival Bhumjaithai party's ambitious leader Anutin Charnvirakul for premier. (Rati Chaphekar)

India Rupee: Expected range for rupee - Sept 3

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: 

(Rati Chaphekar and Pratiksha)

End

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

Edited by Akul Nishant Akhoury

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