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Informist, Thursday, Jul. 2, 2026

 

By Divya Moolayattil

 

MUMBAI – The rupee erased earlier gains and ended at a three-week low against the dollar, marking the fourth consecutive day of decline, as banks persistently bought dollars on behalf of oil and other importers, fearing further weakness in the Indian unit, dealers said. However, the Reserve Bank of India's active intervention through dollar sales, along with a fall in crude oil prices and the dollar index, limited the rupee's losses, they said.

 

"The oilers' (oil marketing companies) buying was so aggressive that the market was caught off guard. Everyone expected the figure to hold for some time, but once 95.00 (a dollar) was crossed, the rupee fell about 25 paise in 5 minutes," a dealer at a public-sector bank. 

 

After hitting a high of 94.9200 a dollar, the rupee settled at 95.3925 a dollar Thursday, 0.2% lower than its previous close. The rupee moved in a wide range of 48 paise during the day. 

 

Other Asian currencies rose marginally against the dollar Thursday, with the South Korean won being the best performer. The Indian unit was one of the worst performers among its Asian peers for the second consecutive day, after the Indonesian rupiah. 

 

The rupee started the day on a strong note as state-owned banks likely sold dollars for the RBI in the

offshore non-deliverable forwards market. A few minutes before the spot market opened, the rupee was trading around 95.20 per dollar, but it opened at 94.95 per dollar. "The RBI hit the market heavily in pre-open and took the rupee to 94.75 (a dollar) from 95.16 (in the NDF market). But RBI couldn't hold the opening level for a long time," the dealer said.

 

Crude oil fell sharply as Qatar, the mediator in the US-Iran negotiations, reported progress on issues related to the interim deal signed on Jun. 17, boosting hopes of a complete and safe reopening of the Strait of Hormuz. This also supported the rupee, dealers said. An Iranian official said a "communication channel" would be established with Washington to report and discuss breaches of the deal. US President Donald Trump also said earlier that the talks were going "very well". At 1530 IST, Brent crude oil prices were down over 1% to $70.44 a barrel from $71.57 Wednesday and $72.92 Tuesday.

 

The dollar index fell below the 101 mark and hit a 10-day low ahead of the US nonfarm payrolls report due Thursday, as investors look for more cues on the Federal Reserve's policy trajectory. The dollar index rose to an over-one-year high in the previous week as the market expected a rate hike by the Fed by September. However, US Federal Reserve Chair Kevin Warsh said price risks have eased in recent weeks, but he remained determined to bring inflation back to the US central bank's 2% target. This dampened expectations of rate hikes soon, which weighed on the dollar. At 1530 IST, the dollar index fell to 100.96 from 101.41 Wednesday, supporting the rupee further. 

However, the rupee slid as oil marketing companies and other importers stepped in aggressively to buy dollars at every dip in dollar-rupee levels, dealers said. While the RBI initially defended the currency in the spot market, its intervention tapered off later in the day, putting further pressure on the Indian unit, they said. "All the factors were in favour of the rupee today, but huge outflows, mostly from oilers, and the RBI also stepped away for some time, weighing heavily on the rupee," a dealer at a private-sector bank said.  

 

This aggressive dollar buying prompted traders to trim their short dollar positions, further dragging the rupee lower, dealers said. 

 

Some dealers said the likelihood of reduced foreign fund inflows from the RBI's Foreign Currency Non-Resident deposits swap facility, after news of the UAE Central Bank restricting certain facilitative activities by representative bank offices, also weighed on the Indian unit. Banks are seeking regulatory clarification, according to media reports.   

 

Meanwhile, a rise in domestic equities supported the rupee, dealers said. On Thursday, the Sensex and Nifty 50 ended 0.8% and 0.7% higher, respectively. 

 

	AT 1530 IST	AT 0900 IST	HIGH	LOW	PREVIOUS (AT 1530 IST)
Spot rupee per $1	95.3925	94.9500	94.9200	95.3950	95.2475
1-year dlr/rupee fwd (paise)	256.91	259.77	260.91	254.91	264.59

 

 

FORWARDS

Dollar-rupee forward premiums fell sharply across tenures as the RBI likely sold dollars for forward delivery to neutralise its spot interventions and avert pushing out rupee liquidity, dealers said. The RBI likely sold forward dollars for up to six months, they said. 

 

However, losses in forward premiums were limited as banks bought forward dollars for importers, noting relatively lower levels, they said. A rise in US Treasury yields also put downward pressure on premiums. At 1530 IST, the 10-year US Treasury yield was at 4.49%, down from 4.47% on Wednesday. 

 

The one-year dollar forward premium fell to an over three-week low of 2.68% or 254.91 paise during the day. At 1530 IST, the one-year exact-period dollar-rupee forward premium was 2.69%, down from 2.76% on Wednesday. On an absolute basis, the premium was 256.91 paise, down from 264.59 paise at close Wednesday.

 

OUTLOOK

On Friday, the rupee will continue to track crude oil prices amid developments related to the peace deal, dealers said. The Indian unit will also track the dollar index after the key US non-farm payrolls and unemployment data, due Thursday. 

 

Dealers expect the rupee to continue its depreciating trend on Friday as importers may buy dollars. They also said the exporters are likely waiting for the rupee to hit 95.50 to start selling dollars. Market participants will also track potential inflows of foreign funds from the slew of measures announced by the RBI earlier this month to attract foreign capital.

 

Dealers see strong technical support for the Indian currency at 95.50 per dollar. The rupee is likely to move in a range of 95.20–95.60 against the dollar Friday.

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India Rupee - World FX:Dlr dn; mkt eyes US payroll data to assess Fed's move

 

	AT 1430 IST	HIGH	LOW	PREVIOUS
GBP/USD	1.3357	1.3363	1.3274	1.3271
EUR/USD	1.1418	1.1421	1.1375	1.1378
NZD/USD	0.5693	0.5695	0.5668	0.5668
AUD/USD	0.6908	0.6911	0.6885	0.6894
USD/JPY	161.0880	162.5960	160.9040	162.5540
USD/CAD	1.4190	1.4224	1.4187	1.4208
EUR/JPY	183.9250	185.0880	183.7430	184.9400
CHF/USD	1.2426	1.2432	1.2350	1.2351
EUR/CHF	0.9188	0.9215	0.9186	0.9206

 

MUMBAI – The dollar index fell slightly ahead of the US nonfarm payrolls report, due Thursday, as investors look for more cues to price in a hawkish policy from the Federal Reserve. The dollar index rose to over one-year high previous week as the market was expecting a rate hike by September. However, US Federal Reserve Chair Kevin Warsh said price risks have come down in recent weeks but he was determined to bring inflation back to the US central bank's 2% target. This dampened expectations of rate hikes soon, which weighed on the dollar. The dollar index fell 0.4% to 100.96 from 101.41 Wednesday. 

 

According to a poll by Reuters, US employers likely added 110,000 jobs in June, with the unemployment rate holding steady at 4.3% in June. However, if the payroll data exceeds expectations, the dollar will gain strength again. 

 

A slight fall in Brent crude oil prices amid progress in negotiations between the US and Iran on implementation of interim deal supported currencies. At 1408 IST, Brent crude oil prices for August delivery were at $71.07 a barrel, down from $71.57 Wednesday and $72.92 Tuesday. 

 

The euro was steady at $1.14 Thursday after European Central Bank President Christine Lagarde said Wednesday risks to euro area inflation and growth have become less pronounced. The pound sterling rose 0.3% to $1.33 from $1.32 Wednesday. 

 

The Japanese yen was up nearly 0.2% to 164.45 a dollar as markets speculated Bank of Japan's intervention to support the currency. The yen fell to a 40-year low this week. 

 

The Swiss franc also rose 0.3% Thursday as Switzerland's Consumer Price Index rose by 0.5% on year in June, compared with a rise of 0.6% in May. The Swedish krona rose 0.4% against the dollar Thursday. (Divya Moolayattil)

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India Rupee: Premiums dn as RBI sells fwd dlrs; importers' demand supports

 

	AT 1330 IST	AT 0900 IST	HIGH	LOW	PREVIOUS (AT 1530 IST)
Spot rupee per $1	95.2950	94.9500	94.9200	95.3525	95.2475
1-year dlr/rupee fwd (paise)	255.50	259.77	260.91	254.90	264.59

 

MUMBAI – Dollar-rupee forward premiums fell sharply across tenures as the Reserve Bank of India likely sold dollars for forward delivery to neutralise its spot interventions and avert pushing out rupee liquidity, dealers said. The RBI likely sold forward dollars for near-term maturity in up to six months, they said. 

 

"The RBI usually sells the dollar mildly, but today it intervened aggressively after a long time, showing that it will react to disorderly moves in the market," a dealer at a private bank said. The rupee rose to a high of 94.9200 a dollar on Thursday as the RBI intervened through dollar sales in offshore non-deliverable forwards and also in the spot market, dealers said.

 

Considering spot dollar sales drain out rupee liquidity from the banking system, the RBI conducts buy-sell swaps to replenish liquidity. A buy-sell swap entails buying dollars for immediate delivery and entering into a contract to sell these at a future date, thereby postponing the drain on systemic liquidity.   

 

The one-year dollar forward premium fell to a three-week low of 2.68% or 254.91 paise Thursday. However, the fall in forward premiums was limited as banks bought forward dollars for importers, noting a lower dollar-rupee forward premium, they said. A rise in US treasury yields also put downward pressure on premiums. At 1330 IST, the 10-year US treasury yield was at 4.49%, against 4.47% Wednesday. 

 

At 1330 IST, the one-year exact period dollar rupee forward premium was 2.68%, down from 2.76% on Wednesday. On an absolute basis, the premium was 255.41 paise, against 264.59 paise at close Wednesday. (Divya Moolayattil)

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India Rupee: Erases gains as importers buy dollars; RBI steps in to support

 

	AT 0930 IST	AT 0900 IST	HIGH	LOW	PREVIOUS (AT 1530 IST)
Spot rupee per $1	95.2950	94.9500	94.9200	95.3525	95.2475

 

MUMBAI – The rupee erased all its early gains against the dollar as banks bought dollars on behalf of importers, noting the sharp appreciation of the rupee, dealers said. "They erased almost 30 paise gains, and it was expected they (importers) will bid agressively at every dip," a dealer at a private sector bank said. 

 

The rupee rose to 94.9200 a dollar in early trade, likely due to the Reserve Bank of India's intervention through dollar sales, according to dealers. The RBI sold dollars agressively after the Indian unit hit a three-week low of 95.2450 Wednesday, dealers said. They said the RBI may intervene agressively again if the Indian unit crosses 95.50 a dollar, a level seen before the RBI announced measures to support the rupee on Jun. 5. India's foreign exchange reserves fell to $672.6 billion in the week ended Jun. 19 from an all-time high of $728.49 billion in the week ended Feb. 27, just before the war in West Asia started.

 

A fall in crude oil prices amid progress in negotiations between the US and Iran on implementation of interim deal supported the rupee, dealers said. At 1231 IST, Brent crude oil prices for August delivery were at $70.65 a barrel, down from $71.57 Wednesday and $72.92 Tuesday. 

 

The rupee was also supported by the dollar index, which retreated sharply to 101.14 at 1230 IST from 101.41 Wednesday, but stayed above a one-year high Thursday. US Federal Reserve chair Kevin Warsh said price risks have come down in recent weeks, but he was determined to bring inflation back to the US central bank's 2% target. This dampened expectation of rate hikes soon, which weighed on the dollar and supported the Indian unit. 

 

Market participants await the crucial US non-farm payrolls report for June, due later in the day, which will decide the course of Asian currencies in the near term, dealers said.

 

For the rest of the day, the rupee is seen moving in the range of 94.90-95.40. Dealers see immediate technical support for the rupee at 95.40 a dollar. (Divya Moolayattil) 

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India Rupee: Technical levels for rupee - Jul 2

 

MUMBAI – At 1047 IST, the rupee was at 94.9700 a dollar. At 0900 IST, the rupee was at 94.9500 a dollar, against the previous close of 95.2475. Following are the key support and resistance levels for the rupee as provided by leading banks and a brokerage:

 

Participant	S2	S1	R1	R2
Public-sector bank	95.10	95.00	94.90	94.80
Private-sector bank	95.20	95.00	94.90	94.85
Private-sector bank	95.20	95.10	94.83	94.70
Foreign bank	95.10	95.05	94.90	94.80
Brokerage firm	95.30	95.20	94.85	94.75
Brokerage firm	95.25	95.15	94.90	94.80

 

(Divya Moolayattil)

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India Rupee: Up sharply on RBI's intervention in offshore NDF, fall in crude

 

	AT 0930 IST	AT 0900 IST	HIGH	LOW	PREVIOUS (AT 1530 IST)
Spot rupee per $1	94.9700	94.9500	94.9200	94.9800	95.2475

 

MUMBAI – The rupee rose sharply against the dollar in early trade as public sector banks sold dollars, likely for the Reserve Bank of India in the offshore non-deliverable forwards market to support the rupee, dealers said. "Pre-market they hit heavily, and the rupee even went to 94.75 (a dollar) levels from 95.16. Liquidity will be very thin during pre-market, so RBI intervened," a dealer at a private sector bank said.   

 

With this move, the RBI has shown it wants the rupee to be above 95.00 a dollar, so the rupee is expected to stay above the psychologically crucial level, they said. However, dealers expect importers to step in at every dip, putting pressure on the rupee, dealers said.  

 

Crude oil prices also fell sharply overnight as news emerged of progress in US-Iran negotiations, which supported the rupee further. US President Donald Trump also said earlier that the talks were going "very well." An Iranian official said a "communication channel" would be established with Washington to report and discuss breaches of the deal. Brent crude oil prices for August futures fell to $70.74 a barrel, from $71.57 Wednesday and $72.92 Tuesday. 

 

The dollar index also retreated slightly after US Fed chair Kevin Warsh said inflation risks had come down in recent weeks and that the central bank would deliver price stability. Warsh's comments dampened expectations of a rate hike in September, which supported the Indian unit. At 0730 IST, the index was at 101.37, down from 101.41 on Wednesday.

 

For the rest of the day, the rupee is expected to move in the range of 94.80-95.10 per dollar. Dealers see immediate technical resisatnce for the rupee at 94.90 a dollar. (Divya Moolayattil)

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India Rupee: Expected range for rupee - Jul 2

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

 

PARTICIPANT	SUPPORT	RESISTANCE
Public-sector bank	95.35	94.90
Private-sector bank	95.40	94.90
Private-sector bank	95.50	94.90
Private-sector bank	95.40	94.90
Private-sector bank	95.30	94.85
Foreign bank	95.35	94.85
Brokerage firm	95.25	94.65
Brokerage firm	95.50	94.90

 

 

 

 

 

 

 

 

 

 

 

 

(Divya Moolayattil)

 

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India Rupee - Asia FX: Mixed; fall in crude oil, dollar index support

 

MUMBAI – Asian currencies traded on a mixed note as investors assessed progress in peace talks and the waning possibility of rate hikes by the Federal Reserve. Qatar, the mediator in US-Iran negotiations, reported positive progress on issues related to the interim deal signed on Jun. 17. An Iranian official said a "communication channel" would be established with Washington to report and discuss breaches of the deal. US President Donald Trump also said earlier that the talks were going "very well".  

 

Crude oil prices fell sharply overnight as news emerged on progress in peace talks. Shipping through the Strait of Hormuz also started picking up after flare-ups between both warring countries subsided during the week. Around 40 ships transited the waterway so far Thursday, up from 24 Monday and 39 on Saturday, according to marine data tracker firm Kpler. Brent crude oil August futures fell to $70.83 a barrel from $71.57 Wednesday and $72.92 Tuesday. 

 

The dollar index also started retreating slightly after US Fed chair Kevin Warsh said inflation risks had come down in recent weeks and that the central bank would deliver price stability. Warsh's comments dampened expectations of a rate hike in September, which supported Asian currencies. At 0730 IST, the index was at 101.37, down from 101.41 Wednesday. 

The South Korean won fell marginally, continuing a losing streak for the fourth consecutive day, as South Korea's consumer inflation rose to a two-and-a-half-year high in June, cementing expectations of an interest rate hike ‌by the central bank as early as its upcoming policy meeting on Jul. 16. The consumer price index rose 3.2% in June on year, from 3.1% in May.  

 

The Thai baht rose slightly amid positive global developments. The baht was up over 0.1% at 33.31 a dollar from 33.89 Wednesday. The Malaysia ringgit rose 0.2% to 4.08 a dollar from 4.09 at the previous close. 

 

The Philippine peso, Chinese yuan and Singapore dollar were broadly steady against the dollar Thursday. (Divya Moolayattil)

 

End

 

US$1 = INR 95.3925

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

 

Edited by Saji George Titus

 

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