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Informist, Wednesday, Sept. 10, 2025

By Gowri Lakshmi

MUMBAI - The rupee ended steady against the dollar Wednesday as dollar sales by banks on behalf of exporters offset dollar purchases for importers, dealers said. A rise in crude oil prices and the threat of another tariff from the EU also weighed on the rupee, dealers said. However, a broadly weak and stable dollar index supported the domestic currency, dealers said. 

After falling to a low of 88.1875, the Indian unit settled at 88.1000 against the greenback, little changed from its previous close of 88.1025. The Indian unit traded in a relatively narrow range of just 12 paise against the dollar during the day. 

Other Asian currencies traded in a mixed note Wednesday as investors await key inflation data from the US, due this week, to get more insights on the US Federal Reserve's rate outlook. The Malaysian ringgit was the worst hit, while the Indonesian rupiah gained the most against the dollar amongst regional peers.

The rupee started the day broadly steady, and most market participants remained calm, awaiting clarity about the likely imposition and impact of the latest tariff threat from the EU, dealers said. On Tuesday, US President Donald Trump urged the EU officials to impose a sweeping 100% tariff on India and China for their purchase of oil from Russia, which Trump claimed is fuelling the ongoing war in Ukraine. 

The US has already imposed a 50% US reciprocal tariff on India, including a 25% punitive tariff for New Delhi's continued purchase of oil from Moscow. Trump has expressed his concern about the ongoing Russia-Ukraine war and has been trying to put pressure on Russia for a ceasefire by restricting its revenue from oil.

"What is happening in the spot (market) is in anticipation of the future. On one end, we have Trump's team still negotiating the trade barriers, and on the other end, Trump is now urging the EU to impose tariffs on India," a currency trader at a broking firm said. "The tariffs from the EU will jeopardise the entire negotiations we are having with the EU on the trade front. So, nothing is clear at the moment, and we have to take on things as they happen." 

The dollar index remained steady, which supported the rupee in early trade, as investors keenly await the August producer price index due later in the day. Investors will also assess the consumer price index for August, due out on Thursday, to gain more insights into the state of the US economy and the likely outcome of the US Federal Open Market Committee at its Sept. 16-17 meeting. 

According to the CME FedWatch tool, traders see a 94% chance of the Fed cutting rates by 25 basis points, with the rest expecting a cut of 50 bps. At 1530 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 97.76, against 97.74 on Monday and 97.44 Friday.

The rupee came under pressure and hit a low of 88.1875 as banks purchased dollars on behalf of oil marketing companies owing to supply-side disruptions due to geopolitical tensions intensifying in West Asia. Crude oil prices hit a one-week high after the Israeli military said it carried out an air strike against Hamas in Qatar. Israeli officials said the attack was aimed at top Hamas leaders, including the exiled Gaza Chief Khalil al-Hayya, according to a Reuters report. 

"Oil companies are slightly panicking now. It will be a dangerous situation for us if we are forced not to purchase from Moscow, as they give us at a very cheap rate. An alternative would make things very expensive for us. Let's hope we won't have to do that," a dealer at a private-sector bank said. 

At 1530 IST, the November Brent Crude contract on the Intercontinental Exchange was at $66.91 per barrel, against $66.39 per barrel Tuesday and $66.02 on Monday. Brent crude prices hit a high of $67.38 per barrel on Tuesday, their highest level since Sept. 4. 

Meanwhile, noting the rise in rupee, exporters stepped in with dollar sales, which prevented the rupee from falling and helped pare the losses, dealers said. Many exporters sold around 88.18 a dollar levels to take advantage of the relatively higher dollar/rupee levels, dealers said. 

FORWARDS

The one-year dollar/rupee forward premium hovered near the four-month high hit Tuesday as banks purchased forward dollars on behalf of importers, dealers said. However, a rise in the yield of the 10-year benchmark US Treasury note pushed the one-year premium level lower, dealers said. The rise in forward premium was also capped as a few exporters sold dollars for forward delivery.

The yield on the 10-year benchmark US Treasury note rose by 3 basis points to 4.08% on Tuesday as investors await key US economic data for further insights into the US Federal Reserve's interest rate outlook at its meeting next week. Forwards of a currency pair are reflective of the interest rate differential between two countries.

The one-year forward premium hit a four-month high of 2.29% for the second consecutive day. However, the rise was limited as exporters sold forward dollars to take advantage of the relatively higher dollar/rupee forward premium, dealers said. They peg the key technical support for the one-year dollar/rupee forward premium at 2.37% and resistance at 2.15%.

On Wednesday, the one-year exact period dollar/rupee premium ended at 2.28%, unchanged from its previous close. On an absolute basis, the premium was 202.97 paise, against 201.65 paise Tuesday.

OUTLOOK

On Thursday, the rupee will take cues from the movement of the dollar index and crude oil prices, dealers said. Dealers expect importers to continue purchasing the greenback, fearing a rise in crude oil prices and a further fall in the rupee.

However, likely foreign fund inflows into domestic financial markets and dollar sales by exporters are expected to support the domestic currency. Moreover, should the rupee come under immense pressure and inch towards 88.40 a dollar, dealers expect the Reserve Bank of India to intervene with dollar sales to limit the rupee's fall.

"The near-term outlook suggests the rupee could gradually gain lost ground towards 87.75, with 88.25 acting as a reversal point on the upside. The broader range remains intact between 87.75–88.25," Jateen Trivedi, vice president, research analyst, commodity and currency at LKP Securities, said in a note. 

During the day, the rupee is seen moving in a range of 87.95 and 88.25 against the greenback. Dealers peg key technical support for the rupee at 88.20 a dollar. 

India Rupee - World FX: Dollar index steady ahead of US producer price index

MUMBAI – The dollar index remained steady Wednesday ahead of data release of US producer price index for August later in the day. Market participants are also waiting for consumer price index for last month that is due Thursday for more cues on the US Federal Reserve's interest rate-outlook. A softer than expected US labour data released last week increased the likelihood of a rate-cut by the US Federal Open Market Committee at its Sept. 16-17 meeting.

According to the CME FedWatch tool, traders see an almost 94% chance of the Fed cutting rates by 25 basis points and 6% probability of a 50 bps cut. At 1423 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies was at 97.86, broadly steady from its previous close of 97.74 Tuesday and 97.44 Monday. The dollar index hit a seven-week low of 97.25 Tuesday. The Australian dollar was up 0.2% tracking the broad-based weakness of the US dollar.

The pound sterling, Canadian dollar, and the Swiss franc were down 0.1% each against the greenback. The Japanese yen fell 0.1% against the US currency despite improvement in Japanese manufacturing sentiment. The Reuters Tankan Index, released earlier in the day, showed Japan's manufacturing sentiment for September was at its best in three years due to easing of trade uncertainties. The manufacturers' sentiment index rose to 13 this month from 9 in August.

The New Zealand dollar was up 0.3% against the greenback. However, gains were likely capped as China's consumer price index declined 0.4% on year in August. The country's producer price index fell 2.9% on year last month, after declining 2.6% the prior month. Any positive or negative change in China's economy directly impact New Zealand's currency due to their close bilateral trade relations.

The euro was down 0.1% against the US currency. On Tuesday, US President Donald Trump urged the EU officials to impose a sweeping 100% tariff on India and China as part of Washington's strategic measure to pressurise Russian President Vladimir Putin to stop its ongoing war with Ukraine.  (Gowri Lakshmi)

India Rupee: Forward premium near 4-month high as importers buy fwd dollars

MUMBAI – The one-year dollar/rupee forward premium hovered near the four-month high hit Tuesday as banks purchased forward dollars on behalf of importers, dealers said. Rise in yield of the 10-year benchmark US Treasury note also pushed the one-year premium level higher, dealers said. However, the rise in forward premium was capped as a few exporters sold dollars for forward delivery.

"Paying (for importers) is there, though not very aggressive and exporters are definitely benefitting from the current levels, they (the levels) are really attractive for them," a dealer at a private-sector bank said.

The yield on the 10-year benchmark US Treasury note rose by 3 basis points to 4.08% Tuesday as investors are waiting for key US economic data for more insights into the US Federal Reserve's interest rate-outlook at its meeting next week. Producer price index for August is due later in the day and the consumer price index is due Thursday. A softer than expected US labour data last week increased the likelihood of a rate-cut by the US Federal Open Market Committee at its Sept. 16-17 meeting.

According to the CME FedWatch tool, traders see an almost 94% chance of the Fed cutting rates by 25 bps and 6% probability of a 50 bps cut. "Right now, more than the data points, it is the outcome on (September) 17th and 100% there will be a rate cut, and most likely a quarter (percentage points) cut," the dealer said. Forwards of a currency pair are reflective of the interest rate differential between two countries.

The one-year forward premium hit a four-month high of 2.29% for the second consecutive day. However, the rise was limited as exporters sold forward dollars to take advantage of the relatively higher dollar/rupee forward premium, dealers said. They peg key technical support for the one-year dollar/rupee forward premium at 2.37% and resistance at 2.15%.

At 1316 IST, the one-year exact period dollar/rupee premium was 2.29%, against the previous close of 2.28%. On an absolute basis, the premium was 202.85 paise, against 201.65 paise Tuesday.  (Gowri Lakshmi)

India Rupee: Tad down as importers buy dollars; exporters' dollar sales limit fall

MUMBAI – The rupee was slightly down against the dollar as banks purchased dollars on behalf of oil marketing companies and other importers, dealers said. The rupee was also weighed as traders bought the greenback during the daily reference rate fixing window, pushing the rupee to hit a low of 88.1870 against the dollar, dealers said. However, a few exporters sold the greenback which limited the fall in the rupee, dealers said. 

"Corporate buying (of dollars) is there, especially as oil prices have risen and geopolitical tensions are heightened," a currency trader at a broking firm said. "Bidding during fixing also was aggressive," he added. 

The rupee was weighed down as oil prices hit a near one-week high Tuesday due to rising supply-side concern after Israeli military said it carried out air strike against Hamas in Qatar, further intensifying the ongoing geopolitical tensions in West Asia. The November Brent crude contract rose over $1 but gave up some of the losses after Washington assured Doha that another attack will not happen. Israeli officials told the military attack was aimed at top Hamas leaders including the exiled Gaza Chief Khalil al-Hayya, according to a Reuters report. 

At 1245 IST, the November Brent Crude contract on the Intercontinental Exchange was at $67.00 per barrel, against $66.39 per barrel Tuesday and $66.02 on Monday. Brent crude prices hit a high of $67.38 per barrel Tuesday, its highest level since Sept. 4. 

However, as the rupee hit the day's low, banks rushed to sell dollars on behalf of exporters, who wanted to take advantage of the relatively higher dollar/rupee levels, dealers said. This prevented the rupee from falling further. "88.20 is also crucial, if not exporters, intervention would definitely be there, otherwise several stop-losses (on short dollar bets) will be triggered," another dealer at a private-sector bank said. 

For rest of the day, the rupee is seen between 88.10 and 88.20 against the greenback. Dealers peg key technical support for the rupee at 88.20 against the dollar.  (Gowri Lakshmi)

India Rupee: Technical levels for rupee - Sept 10

MUMBAI – At 1045 IST, the rupee was at 88.1500 per dollar. At 0900 IST, the rupee was at 88.1375 a dollar, against its previous close of 88.1025. Following are the key support and resistance levels for the rupee as provided by leading banks and brokerages:

(Gowri Lakshmi and Rati Chaphekar)

India Rupee - Asia FX: Mixed; US asks EU to impose 100% tariff on China

MUMBAI – Asian currencies moved on a mixed note Wednesday as market participants await clarity on likely tariffs on China from the European Union. Market participants also await key economic data from the US due this week to get further insights into the state of the US economy and likely rate-outlook by the US Federal Reserve. 

US President Donald Trump Tuesday, in a conversation with officials from the EU, asked them to impose a sweeping 100% tariff on China over its purchase of oil from Russia, the Financial Times reported. China is the largest buyer of oil from Russia and Washington has constantly raised worries over the oil revenue fuelling Moscow in the ongoing war with Ukraine. Trump has been trying to put pressure on Russian President Vladimir Putin for a ceasefire by restraining the country's oil revenue and trade.

The offshore Chinese yuan remained flat against the dollar. Data released Wednesday showed that China's factory deflation eased for the fifth time in six months as consumer prices slumped below zero. The producer price index fell 2.9% in August from a year ago. The consumer price index fell 0.4% last month from a year earlier.

The Taiwan dollar was up 0.3% against the greenback after Taiwan's exports rose more than expected to hit a monthly record of $58.5 billion despite the imposition of the reciprocal tariffs from the US. Taiwan's total trade abroad rose 34.1% last month from a year ago, against a rise of 42% in July, the Finance Ministry said in a statement Tuesday. 

The South Korean won was flat against the dollar as Seoul and Washington are now in a stalemate over a $350 billion investment fund amid heightened US trade policies. South Korea's director of national policy Kim Yong-beom said that even the shipbuilding agreement with Washington will be at risk if both the countries fail to find a middle ground. According to Kim, Seoul was more conerned about securing $350 billion from the foreign exchange market. Washington is yet to strike a deal on lower auto tariffs for South Korea as agreed.

The Philippines peso was down 0.1% against the greenback after the country's unemployment rate hit a three-year high of 5.3% in July from 4.7% in the corresponding period a year ago. The number of unemployed individuals rose to 2.59 million in July. 

The Indonesian rupiah was up 0.1% against the US dollar after Indonesia's new finance minister Tuesday said he would work with the central bank to ease liquidity in the financial markets to spur economic activities and government programmes. Finance Minister Purbaya Yudhi Sadewa, after his meeting with President Prabowo Subianto, vowed to abide by the country's rules which limits the annual budget deficit to 3% of GDP. "I have discussed with the central bank ... and with the president's permission, going forward we will take measures needed to ease liquidity significantly in the short term," Sadewa said. 

Thai Baht was down 0.1% against the greenback. Bank of Thailand announced its intention to implement measures to stabilise the Thai currency after it hit a four-year high recently. The rally in the Thai Baht may negatively impact the export-heavy economy of the country. 

The Malaysian ringgit was down 0.2% against the greenback. The dollar index was broadly steady ahead of the August producer price index due later in the day and the consumer price index on Thursday. The dollar index, which measures the strength in the dollar against a basket of six major currencies, hit a near seven-week low on Tuesday as softer US labour market data reinforced chances of an interest rate cut by the US Fed.

According to the CME FedWatch tool, traders see a 93.7% chance of the Fed cutting rates by 25 bps, with the rest expecting a cut of 50 bps. At 1019 IST, the dollar index, which measures the strength in the dollar against a basket of six major currencies, was at 97.75, against 97.74 Monday and 97.44 Friday.  (Gowri Lakshmi)

India Rupee: Steady as dlr remains stable; mkt awaits clarity on EU tariffs

MUMBAI – The rupee was broadly steady against the dollar on Wednesday as the dollar index remained stable, after falling to a near seven-week low Tuesday, dealers said. Market participants now await clarity on the likely imposition and impact of tariffs by the European Union, dealers said. Traders also await the outcome of the ongoing bilateral trade negotiations between Washington and New Delhi, dealers said. 

"It (rupee) could have opened lower, but market didn't react in a panic mode from the EU tariff news, likely because there are no clarity about it as of now," a dealer at a private sector bank said. Most dealers said market participants have not immediately reacted to the tariff news and more clarity is likely expected once European markets open. 

The dollar index was broadly steady as traders await key economic data later in the week to assess the state of the US economy ahead of the US Federal Open Market Committee's meeting next week. Market participants await the August producer price index on Wednesday, and the consumer price index on Thursday. The dollar index, which measures the strength of the dollar against a basket of six major currencies, hit a near seven-week low on Tuesday as softer US labour market data reinforced chances of an interest rate cut by the US Fed.

According to the CME FedWatch tool, traders see a 93.7% chance of the Fed cutting rates by 25 bps, with the rest expecting a cut of 50 bps. At 0918 IST, the dollar index, which measures the strength in the dollar against a basket of six major currencies, was at 97.76, against 97.74 Monday and 97.44 Friday. 

US President Donald Trump Tuesday reportedly called EU officials and asked them to impose a sweeping 100% tariff on India and China for their purchase of oil from Russia, according to a report by the Financial Times. India currently faces 50% tariff, which includes a 25% punitive cess for its oil purchases from Moscow. New Delhi and Beijing are the largest oil buyers from Moscow. Trump has expressed concerns about Russia's oil revenue fuelling the ongoing war in Ukraine and has been trying to pressurise Russian President Vladimir Putin by restricting Russia's oil revenue and trade. 

Market participants are now focussing on bilateral trade talks between Washington and New Delhi as Trump early Wednesday said his administration was continuing the negotiations to address trade barriers. Trump's positive remark on speaking to Prime Minister Narendra Modi soon has led to optimism about bilateral trade between New Delhi and Washington. 

For the rest of the day, the rupee is seen trading between 88.05 and 88.20 against the dollar. Dealers peg key technical support for the rupee at 88.20 against the greenback.  (Gowri Lakshmi)

India Rupee: Expected range for rupee - Sept 10

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: 

(Gowri Lakshmi and Rati Chaphekar)

End

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

Edited by Saji George Titus

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