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Informist, Friday, Sept. 12, 2025

MUMBAI – The rupee ended sharply higher against the dollar Friday as banks sold dollars, likely for foreign fund inflows related to the initial public offerings of domestic companies, dealers said. A weak dollar index and dollar sales by a few exporters also supported the rupee, they said.

"Inflows are there and some exporters are booking profits though not all, and most are waiting for next week as it will be crucial ahead of the Fed (US Federal Open Market Committee meeting)," a dealer at a private-sector bank said.

The rupee ended sharply higher at 88.2750 against the dollar, against a record closing low of 88.4425 Thursday. The Indian currency moved in a range of over 16 paise during the day. It fell to a low of 88.4175 briefly.

Most other Asian currencies were also up against the greenback due to a weak dollar index. The Indonesian rupiah was the biggest gainer amongst its regional peers, followed by the Malaysian ringgit. 

After opening marginally up at 88.3900 a dollar, the rupee strengthened further tracking the continued weakness in the dollar index and gains in other Asian currencies, dealers said. The dollar index was weak because of softer US labour data and a modest rise in inflation, which reinforced the likelihood of an interest rate-cut by the US Federal Reserve at its Sept. 16-17 meeting.

Data released Thursday showed the US CPI for August rose 0.4%, posting the biggest rise in seven months, after a 0.2% uptick in July. However, the weekly jobless claims for the week ended Saturday showed that the number of Americans filing benefits for unemployment rose sharply, hinting at a weakening labour market condition in the US. Unemployment claims jumped 27,000 to a seasonally adjusted 263,000. Economists polled by Reuters had forecast the claims at 235,000.

Fed funds futures traders are now fully pricing in a rate cut by the US Fed at its meeting next week, with traders seeing a 92.5% chance of a 25 basis points rate cut while the rest expect a 50 bps cut. At 1530 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 97.67, against 97.50 Thursday and 97.81 Wednesday.

US ambassador-designate to India Sergio Gor's comment that US and India are "not that far apart right now" cemented the positive outlook on the trade negotiations, which supported the domestic currency, dealers said. However, noting the rise of the rupee, a few importers purchased dollars, which limited the rise of the Indian unit, dealers said.

The rupee was supported further as banks sold dollars for IPO-linked foreign fund inflows, dealers said. They said the inflows were likely on account of overseas investment into the public offer of Urban Co. Ltd., which opened on Wednesday and will close Friday. The IPOs of Dev Accelerator Ltd. and Shringar House of Mangalsutra Ltd. also opened on Wednesday and will close Friday.

"It's a wait and watch period for the market, until the FOMC decision is out; most likely it will continue in this range. Nobody is in panic and are only hedging whenever and wherever the levels allow for it," a currency trader at a broking firm said.

FORWARDS

The one-year dollar/rupee forward premium ended at an over-four-month high as US Treasury yields fell Thursday after softer labour market data and a modest rise in inflation cemented expectations that the US Federal Reserve will cut interest rates on Wednesday, dealers said. Forwards of a currency pair are reflective of the interest rate differential between the two countries.

The 10-year US bond yield fell to 4.01% Thursday from 4.04% Wednesday. On Thursday, data showed the biggest weekly increase in the number of Americans filing new applications for jobless benefits in four years. Initial claims for state unemployment benefits jumped 27,000 to a seasonally adjusted 263,000 for the week ended Sept. 6, surpassing economists' estimate of 235,000 claims. Meanwhile, US consumer inflation data for August showed prices rising at the fastest pace in seven months but still modest and broadly in line with expectations.

Friday, the one-year exact period dollar/rupee forward premium ended 2.34%, against the previous close of 2.31%. On an absolute basis, the premium was 206.31 paise, against 204.57 paise Thursday.

OUTLOOK 

There is no trading on Saturday. On Monday, the rupee will take cues from the movement of the dollar index and crude oil prices, dealers said. Traders will also closely watch for any developments in the trade talks with Washington and other geopolitical events, especially in West Asia. Dealers have a mixed view on the rupee. Some expect foreign fund outflows and dollar purchases by importers to weigh on the currency while others expect the rupee to appreciate as much as 87.75 a dollar because of a weak dollar.

Dealers also expect importers to continue buying dollars, which may further weigh on the rupee. However, should the rupee fall below 88.50 a dollar, dealers expect exporters to sell dollars to take advantage of the relatively higher dollar/rupee levels. Dealers also expect the Reserve Bank of India to step in with dollar sales, to prevent the rupee from falling sharply and to slow the pace of its depreciation.

"Next week is FOMC meet, most likely the rupee may even test 88.75 (a dollar)," the dealer at the private sector bank said. The rupee is seen moving in a range of 88.20 to 88.50 against the dollar, with dealers pegging key technical support for the rupee at 88.50 a dollar. 

India Rupee - World FX: Yen slumps post US-Japan joint statement on FX

MUMBAI – The Japanese yen slipped 0.5% against the greenback after US and Japan reaffirmed their commitment to "market determined" exchange rates, while agreeing that foreign exchange interventions should be reserved for controlling excess volatility, according to a joint statement Friday. Japan Finance Minister Katsunobu Kato said that the two countries decided to issue a joint statement to reflect the discussions that he and US Treasury Secretary Scott Bessent have had as part of broader trade negotiations.

The Bank of Japan is expected to keep interest rates steady next week as the Japanese economy appears to be struggling with the hit from US tariffs. Bank of Japan's next policy meeting is on Sept. 18-19.

The euro fell 0.1% against the dollar Friday after the European Central Bank Thursday kept the interest rates unchanged, in line with expectations. European Central Bank policymaker Martins Kazaks on Friday singled out the ECB's December meeting as key to determining whether inflation was set to stray from the bank's 2% target.

Market participants do not expect a rate cut by ECB this cycle after central bank chief Christine Lagarde said that the bank remains in a "good place" and risks to the economy had become more balanced than before.

The dollar index fell after a softer labour market data and a modest inflation Thursday reinforced expectation of a rate cut by the US Federal Reserve at its meeting Wednesday. Data Thursday showed the US CPI increased 0.4% in August, its biggest rise in seven months, after rising 0.2% in July. However, the number of filings of new applications for jobless benefits in the US rose sharply last week, indicating labour market conditions are softening in the world's largest economy. Initial claims for state unemployment benefits jumped 27,000 to a seasonally adjusted 263,000 for the week ended Saturday. Economists polled by Reuters had forecast 235,000 claims for the latest week.

Fed funds futures traders are now pricing in a 92.7% chance of the Fed cutting interest rates by 25 basis points next week, with a 7.3% probability of a jumbo 50-bps cut, CME FedWatch showed. At 1515 IST, the dollar index, which measures the strength in the dollar against a basket of six major currencies was at 97.71, against 97.50 Thursday and 97.81 Wednesday.

The pound sterling fell 0.3% against the greenback after UK recorded flat month-on-month growth in July. On an annual basis, GDP growth in July was 1.4% higher than a year earlier--unchanged from June's annual growth rate but a little lower than the 1.5% growth forecast in a Reuters poll. The New Zealand dollar and the Australian dollar fell 0.1% against the greenback whereas the Swiss franc fell 0.2%.  (Rati Chaphekar)

India Rupee: Remains sharply up on IPO-linked FX inflows, weak dollar index

India Rupee: Remains sharply up on IPO-linked FX inflows, weak dollar index

MUMBAI – The rupee remained sharply higher against the dollar Friday as banks sold the greenback, likely for foreign fund inflows into initial public offerings of domestic companies, dealers said. Weakness in the dollar index also supported the Indian unit, they added. 

"There has been selling (of dollars) in the market since morning for some flows. We are also not seeing much buyers (of dollars), which is supporting (the rupee)," a dealer at a private-sector bank said. Dealers said most foreign fund inflows were likely on account of overseas investment into the public offer of Urban Company Ltd., which opened on Wednesday and will close Friday. The IPOs of Dev Accelerator Ltd. and Shringar House of Mangalsutra Ltd. also opened on Wednesday and will close Friday. 

The dollar index remained broadly weak as recent soft economic data reinstated expectations of a rate cut by the US Federal Reserve at its meeting on Wednesday, supporting the Indian currency, dealers said. Fed funds futures traders are now pricing in a 92.7% chance of the Fed cutting interest rates by 25 basis points next week, with a 7.3% probability of a jumbo 50-bps cut, CME FedWatch showed. At 1410 IST, the dollar index, which measures the strength of the greenback against a basket of six major currencies, was at 97.65, against 97.50 Thursday and 97.81 Wednesday.

Meanwhile, some banks stepped in to buy dollars on behalf of importers, who wanted to take advantage of the relatively lower dollar/rupee levels, which capped gains in the Indian unit, dealers said. However, the dollar purchases were not aggressive in nature, they said. "Seems like people have not gone completely long (on dollar) even after yesterday's (Thursday) movement (in rupee)," a dealer at a state-owned bank said. The rupee fell to a record low of 88.4550 a dollar on Thursday. 

For the rest of the day, the rupee is seen moving in a range of 88.10-88.60 against the greenback. Dealers peg key technical resistance for the rupee at 88.10 a dollar.  (Rati Chaphekar) 

India Rupee: 1-year fwd premium at over 4-month high on Fed rate cut bets

India Rupee: 1-year fwd premium at over 4-month high on Fed rate cut bets

NEW DELHI – The one-year dollar/rupee forward premium rose to an over-four-month high as US Treasury yields fell Thursday after softer labour market data and a modest rise in inflation cemented expectations that the US Federal Reserve will cut interest rates on Wednesday, dealers said. Forwards of a currency pair are reflective of the interest rate differential between the two countries.

"The same trend is continuing for forwards. There's just paying all over," a dealer at a private-sector bank said. "I think we will see this trend till the time we get done with FOMC (Federal Open Market Committe) meeting." After rising over 20 basis points last month, the one-year forward premium has jumped almost 14 basis points so far this month. 

The 10-year US bond yield fell to 4.01% Thursday against 4.04% Wednesday. On Thursday, data showed the biggest weekly increase in the number of Americans filing new applications for jobless benefits in four years. Initial claims for state unemployment benefits jumped 27,000 to a seasonally adjusted 263,000 for the week ended Sept. 6, the highest level since October 2021 and surpassing economists' estimate of 235,000 claims.

Meanwhile, US consumer inflation data for August showed prices rising at the fastest pace in seven months but still modest and broadly in line with expectations. Fed funds futures traders are now pricing in an 92.7% chance of the Fed cutting interest rates by 25 basis points next week, with an 7.3% probability of a jumbo 50-bps cut, CME FedWatch showed.

At 1225 IST, the one-year exact period dollar/rupee forward premium was 2.34%, against the previous close of 2.31%. On an absolute basis, the premium was 206.31 paise, against 204.57 paise Thursday. (Pratiksha)

India Rupee: Technical levels for rupee - Sept 12

MUMBAI – At 1110 IST, the rupee was at 88.2850 per dollar. At 0900 IST, the rupee was at 88.3900 a dollar, against its previous close of 88.4425. Following are the key support and resistance levels for the rupee as provided by leading banks and brokerages:

(Rati Chaphekar)

India Rupee: Rises as dollar index weak on Fed rate cut bets, Asian units up

India Rupee: Rises as dollar index weak on Fed rate cut bets, Asian units up

MUMBAI – The rupee rose against the dollar Friday, in line with its Asian peers, as the dollar index fell after a softer labour market data and a modest uptick in inflation Thursday reinforcing expectations of a rate cut by the US Federal Reserve at its meeting next Wednesday, dealers said. 

Data Thursday showed the US CPI increased 0.4% in August, its biggest rise in seven months, after rising 0.2% in July. However, the number of filings of new applications for jobless benefits in the US rose sharply last week, indicating labour market conditions are softening in the world's largest economy, cementing hopes of a rate cut by the Fed next week. Initial claims for state unemployment benefits jumped 27,000 to a seasonally adjusted 263,000 for the week ended Saturday. Economists polled by Reuters had forecast 235,000 claims for the latest week.

Fed funds futures traders are now pricing in a 92.7% chance of the Fed cutting interest rates by 25 basis points next week, with a 7.3% probability of a jumbo 50-bps cut, CME FedWatch showed. At 0955 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 97.65, against 97.50 Thursday and 97.81 Wednesday.

A rise in the Asian currencies, tracking weakness in the dollar index, also helped the Indian unit, dealers said. Asian currencies gained 0.1-0.4% against the dollar, with the Indonesian rupiah being the best performer. 

Further, comments by US ambassador-designate to India Sergio Gor saying US and India were "not that far apart right now" on a trade deal, supported the rupee, dealers said. US has slapped an additional 25% punitive tariff on Indian goods, on top of a 25% reciprocal tariff, citing New Delhi's continued purchases of Russian crude oil. 

However, dealers expect importers to step in through dollar purchases around current dollar/rupee levels, on expectations the rupee may depreciate going ahead, which may cap gains for the Indian unit. The rupee fell to a record low of 88.4550 a dollar Thursday. "We will see buying (of dollars) today. There is lot of buying interest around these levels because one does not know how much RBI (Reserve Bank of India) is willing to protect," a dealer at a state-owned bank said. 

For the rest of the day, the rupee is seen moving in a range of 88.10-88.60 against the greenback. Dealers peg key technical resistance for the rupee at 88.10 a dollar.  (Rati Chaphekar) 

India Rupee - Asia FX: Most up as dlr index falls; South Korean won up 0.1%

MUMBAI – Most Asian currencies rose against the dollar Friday as the dollar index fell slightly after softer labour market data and a modest rise in inflation solidified expectations that the Federal Reserve will cut interest rates on Wednesday. 

On Thursday, data showed the biggest weekly increase in the number of Americans filing new applications for jobless benefits in four years. Initial claims for state unemployment benefits jumped 27,000 to a seasonally adjusted 263,000 for the week ended Sept. 6, the highest level since October 2021 and surpassing economists' estimate of 235,000 claims.

Meanwhile, US consumer inflation data for August showed prices rising at the fastest pace in seven months but still modest and broadly in line with expectations. Fed funds futures traders are now pricing in an 92.7% chance of the Fed cutting interest rates by 25 basis points next week, with an 7.3% probability of a jumbo 50-bps cut, CME FedWatch showed. At 0930 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 97.64, against 97.50 Thursday and 97.81 Wednesday.

The South Korean won rose 0.1% against the greenback. The Bank of Korea Thursday said US trade policy is estimated to lower South Korea's economic growth by 0.45 percentage point this year, leading to expectations of a rate cut by the central bank. The US has imposed 15% tariff on South Korea. On Thursday, a member of the Bank of Korea's monetary policy board said interest rates must be reduced to boost economic growth. Last month, the central bank held interest rates steady for a second consecutive meeting.

The Indonesian rupiah rose 0.4% against the dollar, the most among its peers. The Malaysian ringgit and the Taiwan dollar rose 0.3% against the greenback. Malaysia's industrial production in July rose 4.2% from a year earlier, surpassing expectations, data showed on Thursday. Factory output in July had been forecast to expand 2.1%, according to economists surveyed in a Reuters poll.

The Philippine peso and Thai baht rose 0.1% against the dollar, while the Chinese yuan traded flat. (Rati Chaphekar)

India Rupee: Expected range for rupee - Sept 12

MUMBAI – Following are the expected support and resistance levels for the rupee on Friday, as forecast by leading banks and brokerages in an Informist poll: 

(Rati Chaphekar)

End

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

Edited by Ashish Shirke

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