India Rupee Review
Rises for 4th day in a row; all eyes on FOMC decision
This story was originally published at 16:49 IST on 17 September 2025
Register to read our real-time news.Informist, Wednesday, Sept. 17, 2025
By Pratiksha
NEW DELHI - The rupee ended at a near three-week high against the dollar Wednesday, gaining for the fourth consecutive trading day, as the dollar index weakened ahead of an expected rate cut by the US Federal Open Market Committee, dealers said. Hopes of a trade deal between India and the US also boosted the Indian unit, they said.
"It was just good news all over for rupee," a dealer at a state-owned bank said. "The FOMC expectations, trade talks and positivity in equities, everything played out well for rupee."
The rupee settled at 87.8150 a dollar on Wednesday, appreciating 0.3% compared to the previous close. The Indian currency posted its biggest single day gain in almost a month. Other Asian currencies rose 0.1-0.4% against the US unit, with the Malaysian ringgit emerging as the best performer in the pack.
The rupee started the day sharply higher against the dollar as the dollar index slumped to an 11-week low on Tuesday owing to strong bets of the US Federal Reserve resuming its easing cycle Wednesday and potentially leaving the door open to further rate cuts, dealers said.
The Fed is likely to cut rates by 25 basis points later in the day, after holding them steady at 4.25-4.50% since December. "The weak-dollar environment, fueled by expectations of a 25-basis-point Fed rate cut, has given the rupee some breathing room," Amit Pabari, managing director at CR Forex said in a note. "Near-term, the rupee is likely to face resistance around 88.20."
Fed funds futures traders are now pricing in a 94% chance of the Fed cutting interest rates by 25 bps on Wednesday, with a 6% probability of a jumbo 50-bps cut, CME FedWatch showed. At 1530 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 96.76, against 96.66 Tuesday and 97.34 Monday. The index dropped to 96.56 on Tuesday, its lowest level since Jul. 1.
Shortly after opening, the rupee touched the day's high of 87.7150, as some traders trimmed their long dollar bets noting the slump in the US unit, dealers said. "The market has kind of overpriced the dovishness from Fed at this point, so in case the expectations are not met, I think the rupee will take the hit," a dealer at another state-owned bank said.
Further, upbeat risk appetite among investors owing to optimism about the possibility of a trade deal between India and the US, also supported the Indian unit, dealers said. The commerce ministry said Tuesday that India and the US agreed to intensify efforts for an early conclusion of the bilateral trade agreement that was proposed in February. The statement came after a day-long discussion between the chief negotiators of both countries in New Delhi.
"I think the market is now optimistic that India-US trade deal could see the daylight," a dealer at a private-sector bank said. "But one never really knows when things change for bad, so I am cautiously optimistic." The 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.
A rise in domestic equities also supported the Indian currency, dealers said. On Wednesday, both the Nifty 50 and Sensex ended 0.4% higher.
Meanwhile, state-owned banks stepped in to purchases dollars on behalf of importers, noting the relatively lower dollar/rupee levels, which helped the Indian unit erase almost 10 paise of its gains, dealers said. However, the dollar purchases were not aggressive in nature, as most dealers expect the Indian unit to appreciate after the FOMC meet outcome.
On the other hand, some banks sold dollars on behalf of exporters, who fear a further appreciation in the rupee going ahead, which supported the local unit, according to dealers.
| AT 1530 IST | AT 0900 IST | HIGH | LOW | PREVIOUS(AT 1530 IST) | |
| Spot rupee per $1 | 87.8150 | 87.8200 | 87.7150 | 87.8600 | 88.0525 |
| 1-year dlr/rupee fwd (paise) | 208.87 | 208.12 | 209.54 | 208.12 | 206.53 |
FORWARDS
The one-year dollar/rupee forward premium settled at an over five-month high Wednesday as US Treasury yields fell ahead of an expected rate cut by the US Fed, 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 4.04% Tuesday against 4.05% Monday.
Further, a sharp appreciation in the Indian rupee prompted some banks to buy dollars for forward delivery on behalf of importers, which also supported the forward premiums, dealers said.
However, some banks sold dollars for forward delivery on behalf of exporters, noting the relatively higher levels, which capped gains in premiums, dealers said. The one-year forward premium has jumped almost 17 bps so far this month.
At 1530 IST, the one-year exact period dollar/rupee forward premium was 2.37%, against the previous close of 2.35%. On an absolute basis, the premium was 208.87 paise, against 206.53 paise Tuesday.
OUTLOOK
On Thursday, the rupee will take cues from movement in the dollar index after the FOMC outcome later in the day, dealers said. Apart from the rate decision, market participants will watch out for Fed officials' dot-plot projections for rates and guidance from Fed Chair Jerome Powell on the extent and pace of any further easing.
"Tomorrow (Thursday) rupee will appreciate more, it can easily go up to 87.60-87.65 levels. Fed's rate cut and Powell's comments after that will be very important," a dealer at a state-owned bank said.
Dealers expect the Indian unit to rise sharply to almost 87.50 a dollar, in case the FOMC continues to guide for 50 bps more of rate cuts in 2025 and if Powell's comments are thought to be dovish in tone. However, if Powell opts for a hawkish tone, the Indian unit may move below 88-per-dollar, they said.
Market participants will continue to closely watch out for any news related to India-US trade deal negotiations. Dealers have pegged key technical resistance for the rupee at 87.70 a dollar and support at 88.20. During the day, the rupee may move in a range of 87.60 and 88.10 against the dollar.
India Rupee - World FX: Dlr weak before FOMC decision; pound sterling steady
| AT 1500 IST | HIGH | LOW | PREVIOUS | |
| GBP/USD | 1.3646 | 1.3659 | 1.3630 | 1.3642 |
| EUR/USD | 1.1841 | 1.1874 | 1.1838 | 1.1862 |
| NZD/USD | 0.5971 | 0.5990 | 0.5967 | 0.5986 |
| AUD/USD | 0.6669 | 0.6690 | 0.6666 | 0.6681 |
| USD/JPY | 146.4180 | 146.6840 | 146.2180 | 146.4110 |
| USD/CAD | 1.3756 | 1.3762 | 1.3738 | 1.3737 |
| EUR/JPY | 173.3700 | 173.8488 | 173.3510 | 173.6590 |
| CHF/USD | 1.2707 | 1.2726 | 1.2692 | 1.2703 |
| EUR/CHF | 0.9318 | 0.9335 | 0.9318 | 0.9328 |
MUMBAI – The dollar index hovered around an 11-week low on rising bets of a rate cut by US Federal Reserve later in the day. Market participants will focus on comments by Fed chair Jerome Powell after the decision for cues on the pace of future easing.
Fed funds futures traders are now pricing in a 96.1% chance of the Fed cutting interest rates by 25 basis points, with a 3.9% probability of a jumbo 50-bps cut, CME FedWatch showed. At 1500 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 96.77, against 96.66 Tuesday and 97.34 Monday. The index had fallen to 96.56 on Tuesday, its lowest level since Jul. 1.
The pound sterling was steady against the dollar after the UK headline inflation for August led to expectations of the Bank of England keeping interest rates on hold for the remainder of 2025. Data released Wednesday showed the UK inflation at an annual 3.8% in August, the same pace as in July and in line with a Reuters poll. The Bank of England is widely anticipated to keep interest rates at 4% when it meets on Thursday after reducing it by 25 bps in August.
The Japanese yen fell 0.1% against the greenback after data Wednesday showed Japan's exports fell for a fourth straight month in August, as higher US tariffs weighed on the country's automotive and other manufacturing sectors. Total exports by value dropped 0.1% on year in August, less than a median market forecast of a 1.9?crease and following a 2.6?ll in July. Bank of Japan's policy decision is due Friday, where it is expected to keep interest rates steady and signal cautious optimism as the economy appears to be weathering the hit from US tariffs.
The euro fell 0.2% against the greenback after European Central Bank Vice President Luis de Guindos said Wednesday that the central bank stands ready to adjust policy if the economic situation changes, even if interest rates are appropriate for the time being. "We all agree that we must keep all options open," he said. "If the situation changes, we will adjust our stance accordingly. And to be completely honest: if you find someone who can predict the next six months with certainty, we should hire them immediately."
Data Tuesday showed industrial output in the 20 nations sharing the euro rose by 0.3% on month, just trailing expectations of 0.4% in a Reuters poll of economists. The monthly increase was driven by a 1.5% expansion in Germany, but France and Spain both reported monthly declines. The Swiss franc, too, fell 0.2% against the dollar.
The Australian dollar and New Zealand dollar fell 0.3% against the dollar after data Wednesday showed China's jobless rate for 16 to 24-year-olds, excluding college students, rose to 18.9% in August, the highest since December 2023. Any major change in China's economy directly affects Australia's economy because of their strong bilateral trade relations. (Rati Chaphekar)
India Rupee: 1-yr fwd premium jumps to near 19-wk high on Fed rate cut bets
| AT 1355 IST | AT 0900 IST | HIGH | LOW | PREVIOUS(AT 1530 IST) | |
| Spot rupee per $1 | 87.7725 | 87.8200 | 87.7150 | 87.8600 | 88.0525 |
| 1-year dlr/rupee fwd (paise) | 209.29 | 208.12 | 209.54 | 208.12 | 206.53 |
NEW DELHI – The one-year dollar/rupee forward premium jumped to a near 19-week high Wednesday as US Treasury yields fell ahead of an expected rate cut by the US Federal Reserve, dealers said. Forwards of a currency pair are reflective of the interest rate differential between the two countries.
"The paying is mostly in near forwards. I expect this paying to continue if Fed is dovish along with the rate cut," a dealer at a state-owned bank said. "If the projections are for much more rate cuts (in the US) this year, I am expecting more rise in forwards, maybe till 2.50% (for the one-year forward premium)."
On Wednesday, the Fed is set to cut rates for the first time since December, with a 25-basis-point cut fully priced in and a slim chance of a jumbo 50-bps reduction. Market participants will also watch out for Fed officials' dot-plot projections for rates and guidance from Fed Chair Jerome Powell on the extent and pace of any further easing.
Fed funds futures traders are now pricing in a 96.1% chance of the Fed cutting interest rates by 25 bps on Wednesday, with a 3.9% probability of a jumbo 50-bps cut, CME FedWatch showed. The 10-year US bond yield fell to 4.04% Tuesday against 4.05% Monday.
Further, a sharp appreciation in the Indian rupee prompted some banks to buy dollars for forward delivery on behalf of importers, which also supported the forward premiums, dealers said. The rupee surged to a near three-week high of 87.7150 a dollar earlier in the day, tracking weakness in the dollar index.
At 1355 IST, the one-year exact period dollar/rupee forward premium was 2.37%, against the previous close of 2.35%. On an absolute basis, the premium was 209.29 paise, against 206.53 paise Tuesday. (Pratiksha)
India Rupee:Pares gains as importers buy dollars; gets support from weak dlr
| AT 1340 IST | AT 0900 IST | HIGH | LOW | PREVIOUS(AT 1530 IST) | |
| Spot rupee per $1 | 87.7800 | 87.8200 | 87.7475 | 87.8600 | 88.0525 |
MUMBAI – The rupee gave up some of its gains against the dollars as banks bought dollars on behalf of oil marketing companies and other importers, noting the relatively lower dollar/rupee levels, dealers said. The Indian currency had risen to a near three-week high of 87.7150 a dollar earlier in the day as the dollar index was near its 11-week low on increased bets of a rate cut by US Federal Reserve, dealers said.
Noting the slump in the dollar index, some traders trimmed their long dollar positions, which also supported the Indian currency, they said. "Nobody expected the rupee to go this up, so people started trimming their long dollar bets to take advantage of the situation," a dealer at a private-sector bank said.
Fed funds futures traders are now pricing in a 96% chance of the Fed cutting interest rates by 25 basis points later in the day, with a 4% probability of a jumbo 50-bps cut, CME FedWatch showed. At 1315 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 97.09, against 97.34 Monday and 97.62 Friday. The index fell to a low of 97.04 during the day, its lowest level since Jul. 7.
Investors have turned optimistic about the possibility of a trade deal between India and the US after both the countries Tuesday agreed to intensify efforts for an early conclusion of the bilateral trade agreement that was proposed in February, dealers said. This also supported the rupee and was evident in the rise of domestic equity indices. At 1330 IST, both the Nifty 50 and Sensex were up 0.4?ch.
The 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. "Yesterday's (Tuesday) news about the India-US trade deal has also acted as a boost to the (Indian) currency," a dealer at another private-sector bank said. "If the trade deal actually happens, rupee will stay above the 87 mark for long."
Dealers said some exporters also sold dollars as they fear the Indian unit may appreciate further in the near-term, which supported the local unit. For the rest of the day, the rupee is seen moving in a range of 87.70-88.40 against the greenback. Dealers peg key technical resistance for the rupee at 87.70 a dollar. (Rati Chaphekar)
India Rupee: Technical levels for rupee - Sept 17
MUMBAI – At 1105 IST, the rupee was at 87.7575 per dollar. At 0900 IST, the rupee was at 87.8200 a dollar, against its previous close of 88.0525. 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 | 88.50 | 88.20 | 87.50 | 87.20 |
| Private-sector bank | 88.10 | 87.90 | 87.70 | 87.50 |
| Brokerage firm | 88.40 | 88.20 | 87.50 | 87.20 |
| Brokerage firm | 88.25 | 88.20 | 87.60 | 87.20 |
(Pratiksha and Rati Chaphekar)
India Rupee: Surges on 11-wk low dlr index, optimism on India-US trade deal
| AT 0945 IST | AT 0900 IST | HIGH | LOW | PREVIOUS(AT 1530 IST) | |
| Spot rupee per $1 | 87.7625 | 87.8200 | 87.7475 | 87.8600 | 88.0525 |
India Rupee: Surges on 11-wk low dlr index, optimism on India-US trade deal
MUMBAI – The rupee surged above the key 88-per dollar mark against the dollar as the dollar index slumped to an 11- week low on cemented bets of a rate cut by US Federal Reserve on Wednesday, dealers said. "The fall in the dollar index is the main driver of the appreciation of the rupee today (Wednesday)," a dealer at a state-owned bank said. "Other Asian currencies have also risen because of that, which is also a supporting factor."
Market participants will also focus on comments by Fed chair Jerome Powell after the decision to gauge the pace of future easing. A rise in other Asian currencies also provided support to the rupee, dealers said. Asian currencies gained 0.1-0.3% against the dollar in early trade, with the Malaysian ringgit rising the most.
Fed funds futures traders are now pricing in a 96.1% chance of the Fed cutting interest rates by 25 bps on Wednesday, with a 3.9% probability of a jumbo 50-bps cut, CME FedWatch showed. At 0945 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 96.75, against 96.66 Tuesday and 97.34 Monday. The index dropped to 96.56 on Tuesday, its lowest level since Jul. 1.
The rupee also got a boost as investors turned optimistic about a trade deal between India and the US after both the countries Tuesday agreed to intensify efforts for an early conclusion of the bilateral trade agreement that was proposed in February, dealers said. The statement came after a day-long discussion between the chief negotiators of both countries in New Delhi. The 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.
A rise in domestic equities also gave support to the local unit, according to dealers. At 0945 IST, the Nifty 50 and Sensex were up 0.4?ch. However, dealers expect importers to step in to buy dollars around the current dollar/rupee levels, which may cap the gains in the Indian unit. "I think some buying (of dollars) should come in at these levels. If rupee breaks 87.70, then 87.50 will be a good support," a dealer at another state-owned bank said.
For the rest of the day, the rupee is seen moving in a range of 87.60-88.00 against the greenback. Dealers peg immediate technical resistance for the rupee at 87.70 a dollar. (Rati Chaphekar)
India Rupee - Asia FX: Most up as dollar index slumps; South Korean won down
MUMBAI – Most Asian currencies rose against the dollar Wednesday owing to near certainty that the US Federal Open Market Committee will resume its rate easing cycle Wednesday and opt for more easing even after that. Market participants will also focus on comments from Fed Chair Jerome Powell after the policy decision to gauge the pace of future rate easing.
Fed funds futures traders are now pricing in a 96.1% chance of the Fed cutting interest rates by 25 bps at the upcoming meeting, with a 3.9% 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 96.72, against 96.66 Tuesday and 97.34 Monday.
The Chinese yuan rose 0.1% against the greenback after the country Tuesday unveiled measures to boost services consumption, pledging to further open sectors such as internet and culture and to encourage the hosting of international sports events, in order to support the slowing economy. The measures also pledged to attract more foreign and private capital to fields such as mid to high-end medical care.
The Indonesian rupiah rose 0.1% against the dollar ahead of Bank Indonesia's policy decision later in the day, where it is expected to keep rates unchanged. The Taiwan dollar rose 0.2% against the dollar, ahead of the Taiwan central bank's policy decision on Thursday, where it is likely to keep interest rate unchanged because of the robust performance of the tech-focused economy. The Malaysian ringgit rose 0.3% against the greenback and the Philippine peso rose 0.1%.
Bucking the trend, the South Korean won fell 0.1% against the dollar after South Korea's Presidential office Tuesday said that tariff talks with the US have been stalled for a while as details around a $350 billion investment fund have not been hammered out yet. This investment is a part of the bilateral trade agreement that was agreed upon to reduce the tariffs on South Korea to 15% from 25%.
Further, minutes of the Bank of Korea's August policy meeting showed Tuesday board said the economy needs more policy interest rate cuts in the coming weeks to address the hit to growth from US tariffs. The central bank kept its benchmark interest rate unchanged at 2.50% last month.
The Thai baht, too, fell 0.1% against the dollar after data released Wednesday showed industrial sentiment index fell for the sixth straight month in August due to worries about US tariffs, domestic political undertainty and a strong baht currency. (Rati Chaphekar)
India Rupee: Expected range for rupee - Sept 17
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 | 88.10 | 87.75 |
| Private-sector bank | 88.10 | 87.60 |
| Private-sector bank | 88.00 | 87.75 |
| Foreign bank | 88.15 | 87.65 |
| Brokerage firm | 88.15 | 87.75 |
| Brokerage firm | 88.20 | 87.85 |
| Brokerage firm | 88.00 | 87.75 |
(Pratiksha and Rati Chaphekar)
End
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Vandana Hingorani
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