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Informist, Wednesday, Jul. 8, 2026

 

By Divya Moolayattil

 

MUMBAI – The rupee posted its worst single-day fall against the dollar in a week on Wednesday, and emerged as the worst performer among Asian peers as crude oil prices neared $80 per barrel after US President Donald Trump said the momerandum of understanding with  Iran was "over", dealers said. Hopes of a peace deal to put an end to the war in West Asia and reopen the Strait of Hormuz came crashing down as both countries exchanged the most intense strikes since an interim deal was signed in June.

 

Dealers said importers continuously bought dollars, leading to stop-losses being triggered on short dollar bets. However, losses for the Indian unit were limited as the Reserve Bank of India likely stepped in to sell dollars, they said.

 

"Market was caught off guard after Trump's comments. Looks like we are back to square one. The rupee is likely to test 96.00 (a dollar) this week if crude remains high and the situation does not subside soon," a dealer at a foreign bank said.

 

The Indian currency settled at four-week low at 95.5550 a dollar Wednesday, 0.6% lower than its previous close. The Indian unit erased all the gains it recorded on Tuesday. The rupee traded in a range of 62 paise during the day. Other Asian currencies fell 0.1-0.6% against the dollar Wednesday, with the Thai baht being the worst performer after the Indian rupee.  

 

 

The rupee started the day on a weaker note as crude prices surged overnight after the US Central Command said it had launched "powerful" strikes in response to Iran's attacks on three oil tankers in the Strait of Hormuz and revoked its licence to export oil. Iran's Islamic Revolutionary Guard Corps said it attacked US military targets in Bahrain and Kuwait, dashing hopes of complete and safe passage of ships through the Strait of Hormuz. 

 

Later in the day, the Indian unit plunged to 95.6025 a dollar after Trump said the deal signed with Iran was over. "For me, I think it's over...As far as I'm concerned it's just a waste of time," Trump said at a NATO summit on Wednesday. At 1530 IST, crude oil prices were up 5% at $78.59 a barrel from $74.16 Tuesday, reversing its fall since Jun. 19, when both countries had signed a 14-point MoU. 

 

NATO chief Mark Rutte also supported the US strikes on Iran, saying the US' reaction was "absolutely necessary" as Iran had breached the ceasefire.

 

The rupee was under extreme pressure as banks aggressively bought dollars on behalf of importers, who feared further depreciation amid rising hostilities in West Asia, dealers said. After the rupee touched 95.30 a dollar, stop-losses were triggered on short dollar bets and the Indian unit touched a low of 95.6025 a dollar Wednesday. 

 

However, the Reserve Bank of India stepped in at multiple levels throughout the day to limit further decline of the rupee, dealers said. "There was selling at 95.50 a dollar as the buying demand was heavy, but it couldn't counter that level and moved ahead to protect 95.60 (a dollar)," the dealer said.  

 

In early trade, the rupee rose to a high of 94.9800 a dolalr, as foreign banks sold dollars, likely for foreign investors, following the recent foreign capital measures by the government and the RBI. Foreign fund inflows in the Indian market are gradually picking up, and the pace of inflows is expected to increase further. After posting net foreign portfolio outflows for three consecutive months till May, foreign portfolio investors net bought $1.7 billion in just a week in July. FPIs net invested $2.69 billion in June. 

 

According to the median in an Informist poll, the RBI's swap facility for banks to raise fresh FCNR (B) deposits is expected to draw around $43 billion in inflows.  

 

Bears took charge of the domestic equity market in the last leg of trade on Wednesday, which weighed on the Indian unit. The Nifty 50 settled at a nearly one-month closing low 23882.05, down 2.1% from Tuesday's close. The Sensex also plunged over 2% from the previous close. 

 

The dollar index remained over 101 amid safe haven demand following renewed hostilities in West Asia, which put further pressure on the Indian unit. Investors' expectation of a rate hike by the US Federal Reserve by the end of this year also boosted the greenback. At 1530 IST, the dollar index was at 101.08, against 101.12 Tuesday and 100.86 Monday. Investors also awaited minutes of the Federal Reserve's June policy meeting later in the day for fresh clues on the US interest rate outlook. 

 

	AT 1500 IST	AT 0900 IST	HIGH	LOW	PREVIOUS (AT 1530 IST)
Spot rupee per $1	95.5550	95.1725	94.9800	95.6025	94.9675
1-year dlr/rupee fwd (paise)	272.59	266.36	273.27	264.95	262.00

 

 

FORWARDS 

Dollar-rupee forward premiums rose across tenures on Wednesday as banks bought dollars actively for forward delivery on behalf of importers, dealers said. Importers stepped in actively after oil prices rose sharply following the US attack on Iran in retaliation to Tehran's strike on vessels transiting the Strait of Hormuz. The one-year dollar rupee forward premium rose to a two-week high at 2.84% or 273.27 paise.

 

However, foreign banks sold dollars for forward delivery on behalf of foreign investors, which limited the increase in forward premium. 

 

At 1300 IST, the one-year exact period dollar rupee forward premium was 2.84%, up from 2.76% Tuesday. On an absolute basis, the premium was 272.59 paise, up from 262.00 paise at close Tuesday.

 

OUTLOOK

On Thursday, the rupee will track the movement in crude oil prices as market participants focus on renewed tensions between the US and Iran, dealers said. Minutes of the Federal Reserve's June meeting, due later in the day, will give a clear direction to the dollar index amid evolving expectations of rate hikes by the US Federal Reserve later this year.

 

"Everything depends on the US and Iran's next move. If overnight the situation subsides, the rupee will calm down, or else it will keep depreciating," a dealer at a private sector bank said. 

 

Market participants expect importers to continue buying dollars, fearing rupee depreciation amid uncertainty about the situation in West Asia, which may weigh on the Indian currency. Dealers expect exporters to step in at 95.80 a dollar; they may also wait for 96.00 a dollar if the West Asia war continues.

 

However, most dealers expect the RBI to intervene by selling dollars if the Indian unit comes under pressure. They expect the central bank to intervene aggressively if the rupee touches 95.80 a dollar. Market participants will also track potential foreign fund inflows from a slew of measures announced by the RBI in June to attract foreign capital, they said. 

 

Dealers see strong support for the Indian currency at 95.75 per dollar. The rupee is likely to move in a range of 95.30–95.80 against the dollar on Thursday.

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India Rupee - World FX: Dlr index up as Trump says MoU with Iran over

 

	AT 1430 IST	HIGH	LOW	PREVIOUS
GBP/USD	1.3326	1.3370	1.3327	1.3352
EUR/USD	1.1399	1.1433	1.1399	1.1406
NZD/USD	0.5690	0.5720	0.5674	0.5674
AUD/USD	0.6908	0.6947	0.6908	0.6922
USD/JPY	162.5120	162.5400	162.0800	162.1610
USD/CAD	1.4168	1.4212	1.4159	1.4199
EUR/JPY	185.2540	185.4640	184.9110	184.9700
CHF/USD	1.2371	1.2402	1.2351	1.2366
EUR/CHF	0.9213	0.9230	0.9213	0.9220

 

MUMBAI – The dollar index remained above 101 Wednesday following renewed hostilities in West Asia. US President Donald Trump Wednesday said the memorandum of understanding with Iran was "over" after the US launched a new wave of strikes against Iran and revoked a waiver that allowed the sale of Iranian oil. The US strikes came after Iran attacked tankers transiting through the Strait of Hormuz, putting an end to the safe passage through the key waterway. At 1430 IST, the index was at 101.13, against 101.12 Tuesday. 

 

Markets also await minutes of the Federal Reserve's June policy meeting later in the day for fresh clues on the US interest rate outlook, which will give a clear direction to the dollar index. 

 

Brent crude oil prices rose to $78.32 a barrel from $74.16 Tuesday and $71.99 Monday. Crude oil prices rose nearly 8% from Tuesday's low after the situation in West Asia escalated quickly.

The euro fell 0.2% to $1.141 as the greenback gathered strength after Trump's comments. The pound sterling fell 0.3% to $1.33 from $1.34 Tuesday. The Japanese yen rose sharply by 0.3% to 162.34 a dollar from 161.90 Wednesday. 

 

The Canadian dollar was the only currency in the dollar index that rose Wednesday. The Canadian dollar was marginally up at 1.42 a dollar as the country posted a trade surplus of 4.24 billion Canadian dollars in May, the highest since May 2022 and above 3.41 billion Canadian dollars in April. 

 

The Swedish krona and Swiss franc were down 0.3?ch on Wednesday. (Divya Moolayattil)

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India Rupee: 1-yr premium at 2-week high as banks buy fwd dlr for importers

 

	AT 1300 IST	AT 0900 IST	HIGH	LOW	PREVIOUS (AT 1530 IST)
Spot rupee per $1	95.1775	95.1725	94.9800	95.2375	94.9675
1-year dlr/rupee fwd (paise)	267.00	266.36	267.27	264.95	262.00

 

MUMBAI – Dollar-rupee forward premiums rose across tenures on Wednesday as banks bought dollars actively for forward delivery on behalf of importers, dealers said. Importers stepped in actively after oil prices rose sharply following the US attack on Iran in retaliation to Tehran's strike on vessels transiting the Strait of Hormuz. The one-year dollar rupee forward premium rose to a two-week high at 2.79% or 267.27 paise. The rupee fell to a low of 95.2675 a dollar in the spot market amid heavy demand for dollars.

 

However, foreign banks sold dollars for forward delivery on behalf of foreign investors, which limited a further increase of the forward premium. The rupee hit a high of 94.9800 a dollar in the spot market on Wednesday amid foreign banks and public sector banks' dollar sales likely for foreign investors and RBI, respectively.

 

The forward premium was also under pressure as US Treasury yields fell slightly, but remained at a four-week high as investors monitored the renewed geopolitical tensions between Iran and the US. The 10-year US Treasury yield fell to 4.55% from 4.56% Tuesday, but rose sharply from 4.48% Monday. 

 

At 1300 IST, the one-year exact period dollar rupee forward premium was 2.79%, up from 2.76% Tuesday. On an absolute basis, the premium was 267.00 paise, up from 262.00 paise at close Tuesday.

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India Rupee: Falls further as importers buy dollars; FX inflows support

 

	AT 1230 IST	AT 0900 IST	HIGH	LOW	PREVIOUS (AT 1530 IST)
Spot rupee per $1	95.2175	95.1725	94.9800	95.2375	94.9675

 

MUMBAI – The rupee fell sharply against the dollar as banks bought dollars for importers, who feared a further rise in crude oil prices amid fresh escalation in the West Asia war, dealers said. Crude oil prices continued to rise after they spiked nearly 4% overnight Tuesday, the highest single-day rise since Jun. 2, following US strikes on Iran. These attacks came after Iran hit vessels transiting the Strait of Hormuz, cementing its control over the key waterway, despite an interim deal between the two warring nations. 

 

The US also revoked the licence Tuesday that let Iran export its oil. "The shipping through Hormuz was gradually picking up; the recent escalation will put a halt to it again, indicating that the peace deal is unreliable. Eventually going back to high crude oil and fear of high inflation," a dealer at a private sector bank said. At 1230 IST, Brent crude oil prices for September delivery were $76.55 a barrel, up from $74.16 Tuesday and $71.99 Monday. 

 

However, foreign banks sold dollars likely for foreign investors, following the government's and RBI's recent foreign capital measures, which limited decline of the rupee, they said. "There is a huge amount of demand coming in from oilers (oil companies) now, but some of it is being offset by selling from foreign banks," a dealer at a private sector bank said.    

 

Foreign fund inflows in the Indian market are gradually picking up, and the pace of inflows will increase further, dealers said. After posting net foreign portfolio outflows for three consecutive months till May, foreign portfolio investors net bought $1.7 billion in just a week in July. FPIs net invested $2.69 billion in June. According to a median of a separate Informist Poll, the RBI's swap facility for banks to raise fresh FCNR (B) deposits is expected to draw around $43 billion in inflows. 

 

Some dealers speculate that banks also sold dollars to the Reserve Bank of India mildly, which limited the fall of the rupee. 

 

Domestic equities fell sharply Wednesday, which weighed on the Indian unit. The Nifty 50 and the Sensex were down 0.6?ch at 1200 IST. "Until the outflows in equities stop, the appreciation of the rupee will just be temporary," the dealer said.

 

The dollar index strengthened amid safe haven demand following renewed hostilities in West Asia, which put further pressure on the Indian unit. Investors' expectation of a Federal Reserve rate hike by the end of this year also boosted the greenback. At 1230 IST, the dollar index was 100.99 against 101.12 Tuesday and 100.86 Monday. Investors also awaited the minutes of the Federal Reserve's June policy meeting later in the day for fresh clues on the US interest rate outlook. 

 

For the rest of the day, the rupee is expected to move in a range of 95.00-95.30. Dealers see immediate technical support for the rupee at 95.30 a dollar. (Divya Moolayattil)

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India Rupee: Falls as oil rises above $75/bbl amid renewed attacks in W Asia

 

	AT 0930 IST	AT 0900 IST	HIGH	LOW	PREVIOUS (AT 1530 IST)
Spot rupee per $1	95.1450	95.1725	95.0775	95.1725	94.9675

 

MUMBAI – The rupee fell sharply against the dollar in the early trade as crude oil prices rose sharply overnight after the US struck Iran and cancelled a licence to export oil. This strike came after Iran hit vessels transiting the Strait of Hormuz, cementing its control over a key waterway, despite ceasefire agreement.

 

After rising 4% Tuesday, Brent crude oil prices continued to rise Wednesday following the US attacks on Iran. At 0930 IST, Brent crude oil prices for September delivery were at $76.08 a barrel, up from $74.16 Tuesday and $71.99 Monday. Crude oil prices have been trading at pre-war levels since Jun. 26, when both warring countries agreed to reopen the Strait of Hormuz for global trade.

 

Domestic equities fell sharply, which weighed on the Indian unit. The Nifty 50 and the Sensex were down 0.6?ch at 0930 IST. "We need to see how equities behave. Yesterday, they fell despite the rupee being one of the best performer. FPIs may continue to sell due to fall in equities," a dealer at a private sector bank said.

 

Dollar index also gained strength amid its safe haven demand following renewed hostilities in West Asia. Investors' expectation of Federal Reserves rate hike by the end of this year also boosted the greenback. At 0930 IST, dollar index was 101.09 against 101.12 Tuesday and 100.86 Monday. Investors also awaited the minutes of the Federal Reserve's June policy meeting later in the day for fresh clues on the US interest rate outlook. 

 

Dealers expect importers' dollar demand to put pressure on the Indian unit during the day. The Reserve Bank of India is expected to intervene and support at multiple levels to limit the sharp fall of the rupee, they said. 

 

For the rest of the day, the rupee is expected to move in the range of 95.00-95.30. Dealers see immediate technical support for the rupee at 95.30 a dollar. (Divya Moolayattil) 

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India Rupee: Expected range for rupee - Jul 8

 

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

 

PARTICIPANT	SUPPORT	RESISTANCE
Private-sector bank	95.40	94.90
Private-sector bank	95.35	95.00
Private-sector bank	95.45	94.80
Foreign bank	95.90	94.25
Brokerage firm	95.35	94.90
Brokerage firm	95.50	94.80

 

 

 

 

 

 

 

 

 

(Divya Moolayattil)

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India Rupee - Asia FX: Down as oil, dlr rise on renewed attacks in West Asia

 

MUMBAI – Asian currencies fell against the dollar in early trade as crude oil prices, which were at pre-war levels since the US and Iran agreed to reopen the Strait of Hormuz, rose sharply overnight after the US struck Iran in retaliation Tuesday and revoked licence to export oil. This strike came after Iran hit vessels transiting Strait of Hormuz, cementing its control over key waterway, despite the ceasefire agreement.

 

Brent crude rose nearly 4% to $74 per barrel Tuesday, marking its sharpest rise since Jun. 2. At 0700 IST, Brent crude oil prices for September delivery were at $75.51 a barrel, up from $74.16 Tuesday and $71.99 Monday. Although oil prices remain well below the highs during the war, developments in West Asia bring the risk of a sharp spike in the near term.

 

The dollar index also bounced back to an over a one-week high Wednesday as bids for a safe-haven currency rose after the US resumed attacks on Iran, renewing geopolitical tensions. At 0700 IST, the index rose to 101.18 from 101.12 Tuesday and 100.85 Monday. Investors also awaited the minutes of the Federal Reserve's June policy meeting later in the day for fresh clues on the US interest rate outlook.

 

The South Korean won fell marginally for the second consecutive day at 1,515.28 from 1,513.18 Tuesday. However, the currency remained under pressure due to persistent foreign equity outflows, which continued to limit the won's recovery despite launching a 24-hour foreign exchange trading to improve foreign investor access. The Malaysian ringgit fell 0.3% in early trade on Wednesday. 

The Philippine peso fell 0.2% to 61.56 from 61.42 Tuesday as inflation remained well above the central banks' target of 3%, but retreated from a three-year high touched in April. Philippine inflation slowed to 6.4% in June compared with 6.8% in May and 7.2% in April. 

 

The Thai baht also fell marginally to 33.36 a dollar from 33.35 Tuesday as investors expect the central bank to keep the interest rate unchanged at 1.0% in the next policy meeting due August, which weighs on baht attractiveness. 

 

The Taiwan dollar fell slightly at 32.16 from 32.13 in the previous session. The Chinese yuan was a tad down at 6.79 a dollar Wednesday. (Divya Moolayattil)

 

End

 

US$1 = INR 95.5550

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

 

Edited by Avishek Dutta

 

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