India Rupee Review
Ends near 3-week high on FX inflows, weak dollar index
This story was originally published at 17:10 IST on 18 August 2025
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By Gowri Lakshmi
MUMBAI – The rupee ended near a three-week high against the dollar Monday due to persistent dollar sales by foreign banks, likely for foreign fund inflows, dealers said. A generally weak dollar index and exporters' dollar sales also supported the rupee throughout the day, dealers said.
"Sell-off (dollar sales) were there since morning, and with every uptick in rupee, exporters were also selling. Rupee is heavily guarded after 50 (87.50 a dollar and below), so they (exporters) had to sell," a dealer at a foreign bank said.
After hitting a high of 87.3225 a dollar, the Indian unit settled at 87.3500, its highest closing level since Jul. 29. The domestic currency moved in a relatively lower range of just 15 paise during the day. The Indian unit had closed at 87.5500 a dollar on Thursday.
Other Asian currencies moved on a mixed note against the dollar as market participants await details of the meeting between US President Donald Trump and his Ukrainian counterpart Volodymyr Zelensky due later in the day. The Indian unit was the best performing currency among its peers while the Malaysian ringgit was hit the worst, falling over 0.2% against the US unit.
The rupee started the day higher against the dollar at 87.4575 due to foreign fund inflows, as investor sentiment improved after Prime Minister Narendra Modi Friday said that the goods and services tax is reviewing the indirect tax regime and next generation reforms will be brought by Diwali. He also said that tax on regular-use items will be brought down significantly, which will help lower prices of such goods and help domestic micro, small, and medium enterprises.
The finance ministry said in a post on social media that the central government is proposing significant reforms in GST. "It will be focused on three pillars, namely structural reforms, rate rationalisation and ease of living," the post said. "Key areas identified for next-generation reforms include the rationalisation of tax rates to benefit all sections of society, especially the common man, women, students, middle class, and farmers."
Further, dealers said investor sentiment were also boosted after S&P Global Ratings Thursday upgraded India's long-term unsolicited sovereign credit ratings to 'BBB' from 'BBB-', citing the Indian economy's resilience and sustained fiscal consolidation for the rating upgrade. On Monday, both the benchmark indices, the Nifty 50 and the BSE Sensex ended 1.0% and 0.8% higher, respectively.
The rupee was also supported due to the general weakness in the dollar index, dealers said. "I think the dollar index will generally remain weak in the near to medium term and if it breaks 96.80 levels, we can see even rupee moving 100-200 paise," the dealer at the foreign bank said.
The dollar index eased Friday after the US consumer sentiment index fell to 58.6 in August from 61.7 the previous month owing to worries about inflation. The US currency was also weighed on rising expectation of an interest rate cut by the US Federal Reserve at its September meeting. Traders now see an 84.6% probability of a rate cut by the US Federal Open Market Committee at its Sept. 17 meeting, according to the CME FedWatch tool.
At 1530 IST, the dollar index, which measures the strength in the dollar against a basket of six major currencies, was at 97.98, a tad down from 98.20 Thursday but steady from 97.79 Wednesday.
Market participants are now keenly awaiting the Federal Reserve's Jackson Hole Symposium to be held Thu-Sat, where US Fed Chair Jerome Powell is due to speak on the economic outlook and the central bank's policy framework.
The rupee further got a boost as exporters sold the greenback, noting the unexpected appreciation in the Indian unit and in anticipation of a further rise of the rupee in the near term, dealers said. They said exporters sold dollars around 87.40 a dollar. A few importers purchased the greenback in early trade to take advantage of the relatively lower dollar/rupee levels, dealers said. This capped a larger gains of the rupee, according to some dealers. However, dealers said that most importers remained on the sidelines, awaiting further rise of the rupee to make most out of the lucrative dollar/rupee levels.
| AT 1530 IST | AT 0900 IST | HIGH | LOW | PREVIOUS(AT 1530 IST) | |
| Spot rupee per $1 | 87.3500 | 87.4575 | 87.3225 | 87.4725 | 87.5500 |
| 1-year dlr/rupee fwd (paise) | 183.63 | 182.32 | 184.61 | 182.13 | 184.23 |
FORWARDS
The one-year dollar/rupee forward premium came off the day's low and ended flat as banks bought dollars for forward delivery on behalf of importers, noting the relatively lower levels, dealers said. The one-year forward premium fell to a low of 2.08?rlier in the day.
Premiums fell tracking a rise in US Treasury yields after multiple robust economic data in the US dimmed prospects of a rate cut by the US Federal Reserve this year. Forwards of a currency pair are reflective of the interest rate differential between two countries.
Data Friday showed that US retail sales increased solidly in July, after an unexpected spike in producer price index data Thursday. US retail sales rose 0.5% last month after an upwardly revised 0.9% gain in June. Further, US producer prices increased by the most in three years in July. Dealers said importers bought the greenback for forward delivery to take advantage of the relatively lower premium levels. The one-year forward premium has jumped 13 bps so far this month.
On Monday, the one-year exact period dollar/rupee premium ended at 2.10%, unchanged against its previous close. On an absolute basis, the premium was 183.63 paise, against 184.23 paise Thursday.
OUTLOOK
On Tuesday, the rupee will likley track movements of the dollar index and crude oil prices, dealers said. Makret participants will also closely look out for details regarding the meeting between Zelensky and Trump, dealers said.
"Market has factored in the worst case and rupee is currently at whatever level after pricing in the risks, it cannot worsen from here due to tariff measures, unless a higher tariff (on India) is announced," the dealer at the foreign bank said.
Dealers said the rupee will likely sustain its gains against the greenback in the near term due to continuous inflows after improved investor sentiment. Dealers also expect exporters to sell dollars in the coming days, to take advantage of the relatively higher dollar/rupee levels. However, importers are likely to purchase the greenback to make the most out of the lucrative dollar/rupee levels, which may prevent a sharp rise of the rupee, dealers said.
During the day, the rupee is expected to move in a range of 87.20 to 87.50 a dollar. Dealers peg technical resistance for the rupee at 87.20 a dollar and support at 87.50.
India Rupee - World FX: Euro falls before Trump-Zelenskyy peace talks
| AT 1554 IST | HIGH | LOW | PREVIOUS | |
| GBP/USD | 1.3539 | 1.3565 | 1.3531 | 1.3554 |
| EUR/USD | 1.1679 | 1.1716 | 1.1671 | 1.1703 |
| NZD/USD | 0.5939 | 0.5943 | 0.5924 | 0.5921 |
| AUD/USD | 0.6513 | 0.6540 | 0.6506 | 0.6504 |
| USD/JPY | 147.4360 | 147.5830 | 147.0400 | 147.1200 |
| USD/CAD | 1.3796 | 1.3817 | 1.3792 | 1.3817 |
| EUR/JPY | 172.1960 | 172.6600 | 172.0570 | 172.1761 |
| CHF/USD | 1.2392 | 1.2416 | 1.2378 | 1.2391 |
| EUR/CHF | 0.9424 | 0.9446 | 0.9423 | 0.9434 |
MUMBAI – The euro was down 0.2% against the dollar as investors anticipated Monday's meeting between US President Donald Trump, Ukrainian President Volodymyr Zelenskyy, and NATO (North Atlantic Treaty Organization) officials at the White House to deliberate on the conditions proposed by Russian President Vladimir Putin for concluding the war in Ukraine.
On Friday, Trump held a meeting with Putin in Alaska to discuss a potential peace deal. After the meeting, Trump said Putin had proposed freezing the majority of front lines if Kyiv surrendered all of Donetsk, the industrial area that is a key objective for Moscow, according to Reuters. Zelenskyy has dismissed the notion of relinquishing land.
The dollar index remained firm as economic data from the US hinted at resilience in the area. Data showed that US retail sales rose in July, rising 0.5% from the prior month, after an unexpected spike in producer price index data on Thursday renewed traders' concerns over inflation, reducing market expectations for rate cuts by the Federal Reserve this year. US producer prices increased the most in three years in July. At 1553 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 98.00, down from 98.20 Thursday but steady from 97.79 Wednesday.
The pound sterling was down 0.1% against the dollar as investors awaited the release of the UK CPI data for July on Wednesday. Investors will closely monitor the UK inflation data as it will influence market expectations for the Bank of England's monetary policy outlook. The core CPI – which excludes volatile items such as food, energy, alcohol and tobacco – is estimated to have grown at a steady pace of 3.7% on year.
Traders will focus on US Federal Reserve Chair Jerome Powell's comments at the Jackson Hole Symposium later in the week for any indication of a rate cut by the US Federal Open Market Committee in September in light of the recent US economic data. Fed fund futures are now expecting a 15% chance of a status quo on rates by the US FOMC in September, up from 11% a week ago, according to the CME's FedWatch tool. Traders will also watch out for Japanese inflation data, due later in the week, to gauge chances of a rate hike by the Bank of Japan this calendar year. (Kabir Sharma)
India Rupee: Premium off lows as importers buy forward dollars at low levels
| AT 1420 IST | AT 0900 IST | HIGH | LOW | PREVIOUS(AT 1530 IST) | |
| Spot rupee per $1 | 87.3675 | 87.4575 | 87.3225 | 87.4725 | 87.5500 |
| 1-year dlr/rupee fwd (paise) | 184.19 | 182.32 | 184.61 | 182.13 | 184.23 |
NEW DELHI – The one-year dollar/rupee forward premium came off the day's low as banks bought dollars for forward delivery on behalf of importers, noting the relatively lower levels, dealers said. The one-year forward premium fell to a low of 2.08?rlier in the day. "The market is quiet now. It opened slightly lower looking at US yields but then some profit booking came in," a dealer at a foreign bank said.
Premiums fell tracking a rise in US Treasury yields after multiple robust economic data in the US dimmed prospects of a rate cut by the US Federal Reserve this year. Forwards of a currency pair are reflective of the interest rate differential between two countries.
Data Friday showed that US retail sales increased solidly in July, after an unexpected spike in producer price index data Thursday. US retail sales rose 0.5% last month after an upwardly revised 0.9% gain in June. Further, US producer prices increased by the most in three years in July. Fed fund futures traders are now pricing in an 84% chance the Fed would ease rates by 25 bps next month, down from 98% last week, according to CME FedWatch Tool.
Dealers said importers bought the greenback for forward delivery to take advantage of the relatively lower premium levels. The one-year forward premium has jumped 13 bps so far this month.
At 1420 IST, the one-year exact period dollar/rupee premium was 2.10%, unchanged against its previous close. On an absolute basis, the premium was 184.19 paise, against 184.23 paise Thursday. (Pratiksha)
India Rupee: Hits 2-wk high on foreign fund inflows, exporters' dollar sales
| AT 1235 IST | AT 0900 IST | HIGH | LOW | PREVIOUS(AT 1530 IST) | |
| Spot rupee per $1 | 87.4275 | 87.4575 | 87.3225 | 87.4725 | 87.5500 |
MUMBAI – The rupee remained higher against the dollar and hit a two-week high of 87.3225 earlier in the day owing to likely foreign fund inflows after improved investor sentiment and exporters' dollar sales, dealers said. A relatively weaker dollar index also supported the rupee, dealers said. "There has been sell-off (dollar sales) by foreign banks and nats (nationalised banks) since the morning, it's likely the inflows from upgradation and (domestic) growth expectations after GST (goods and services tax) reforms," a dealer at a foreign bank said.
The rupee was also supported by significant gains in the domestic stock market, dealers said. At 1241 IST, the benchmark indices, the Nifty 50 and BSE Sensex, were up 1.0% and 0.9%, respectively. Dealers said inflows into equities were likely because of upgrade in India's long-term unsolicited sovereign credit rating by S&P Global Ratings on Thursday to 'BBB' from 'BBB-', citing the Indian economy's resilience and sustained fiscal consolidation.
Investor sentiment was also boosted by Prime Minister Narendra Modi's announcement on Friday that the government is reviewing the indirect tax regime and next generation reforms will be brought by Diwali. He also said that tax on regular-use items will be brought down significantly, which will help lower prices of such goods and help domestic micro, small, and medium enterprises.
Dollar sales by exporters also provided support to the domestic currency, dealers said. They said exporters sold dollars at around 87.40 as they expect the rupee to appreciate further in the near term. Importers mostly stayed on the sidelines as they expect the rupee to rise further, dealers said.
A fall in dollar index also supported the rupee, dealers said. At 1307 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 97.85, down from 98.20 Thursday but steady from 97.79 Wednesday.
For the rest of the day, the rupee is seen moving in a range of 87.20-87.50 against the dollar. Dealers peg key technical resistance for the Indian unit at 87.20 against the greenback. (Gowri Lakshmi)
India Rupee: Technical levels for rupee - Aug 18
MUMBAI – At 1228 IST, the rupee was at 87.4200 per dollar. At 0900 IST, the rupee was at 87.4575 a dollar, against the previous close of 87.5500. Following are the key support and resistance levels for the rupee as provided by leading banks and brokerages:
| Participants | S2 | S1 | R1 | R2 |
| State-owned bank | 87.98 | 87.80 | 87.40 | 87.20 |
| Foreign bank | 88.00 | 87.70 | 87.20 | 87.10 |
| Brokerage firm | 87.80 | 87.70 | 87.35 | 87.20 |
| Brokerage firm | 88.00 | 87.98 | 87.50 | 87.40 |
(Gowri Lakshmi and Pratiksha)
India Rupee: Rises on fall in dollar index, gains in domestic equities
| AT 0923 IST | AT 0900 IST | HIGH | LOW | PREVIOUS(AT 1530 IST) | |
| Spot rupee per $1 | 87.4150 | 87.4575 | 87.3775 | 87.4625 | 87.5500 |
MUMBAI – The rupee rose against the dollar Monday as the dollar index fell due to rising expectations of an interest rate cut by the US Federal Reserve at its next meeting and as investors await the outcome of a meeting between US President Donald Trump and his Ukrainian counterpart Volodymyr Zelensky later in the day, dealers said. "The general weakness in the dollar is the reason why the rupee has opened with the 10-paise gap-up," a dealer at a private sector bank said.
The dollar index eased Friday after the US consumer sentiment index fell to 58.6 in August from 61.7 the previous month owing to worries about inflation. However, a rise in retail sales for last month supported the US dollar. Data published Friday showed US retail sales rose 0.5% in July, in line with market expectations from the Dow Jones estimates.
Chicago Federal Reserve President Austan Goolsbee Friday said economic reports from last week showed a rise in services inflation, which was a source of "unease" for the central bank as he sees this as a stagflationary impulse from tariffs on the economy. The producer price index for July recorded an unexpected rise of 0.9% on month, the largest gain in nearly three years.
Traders now see an 84.6% probability of a rate cut by the US Federal Open Market Committee at its Sept. 17 meeting, according to the CME FedWatch tool. At 0914 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 97.87, down from 98.20 Thursday but steady from 97.79 Wednesday.
A rise in domestic equities also supported the rupee, according to dealers. At 0926 IST, the benchmark stock indices, the Nifty 50 and the BSE Sensex were up 1.3% and 1.2%, respectively. Dealers cited S&P Global Ratings upgrading India's rating as one of the reasons for the upward movement of the rupee and domestic equity market. S&P Global Ratings Thursday upgraded India's long-term unsolicited sovereign credit ratings to 'BBB' from 'BBB-', citing the Indian economy's resilience and sustained fiscal consolidation for the rating upgrade.
Most dealers said despite the rise of the domestic currency, most importers remained on the sidelines, awaiting further rise of the rupee against the greenback, likely near 87.30-87.20, to make the most of relatively lower dollar/rupee levels. However, a few dealers were of the view that dollar purchases by some importers would cap the gains of the rupee. "Buyers will soon take it to 50 (87.50) and below," the dealer at the private sector bank said.
During the day, the rupee is seen moving in a range of 87.30 and 87.70 against the greenback. Dealers peg key technical resistance for the domestic currency at 87.30 a dollar. (Gowri Lakshmi)
India Rupee - Asia FX: Most down; Thailand's June qtr GDP beats expectations
MUMBAI – Most Asian currencies were down against the dollar despite a slight fall in the dollar index as investors await the outcome of the meeting between US President Donald Trump and Ukrainian President Volodymyr Zelenskyy scheduled later in the day. The US dollar eased on rising expectations of an interest rate cut by the US Federal Reserve at its September policy meeting and as investors watched out for the Jackson Hole Symposium on Aug. 21-23, where US Federal Reserve Chair Jerome Powell will speak.
The dollar index declined after the University of Michigan's consumer sentiment index fell to 58.6 in August from 61.7 in July due to worries over inflation. Further, data published on Friday showed that retail sales rose 0.5% last month, in line with expectations from the Dow Jones consensus.
Chicago Federal Reserve President Austan Goolsbee Friday said the latest economic reports from last week showed a rise in services inflation, which is a source of "unease" for the central bank, as he sees this as a stagflationary impulse from tariffs on the economy. The producer price index for July recorded an unexpected rise of 0.9% on month, positing the largest gain in nearly three years.
At 0845 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 97.89, down from 98.20 Thursday but steady from 97.79 Wednesday. According to the CME FedWatch tool, traders see an 84.6% probability of a rate cut by the US Federal Open Market Committee at its Sept. 17 meeting.
The Thai bhat was up 0.1% against the greenback after the June quarter GDP showed that the Thai economy beat the market estimates of 2.5% and expanded 2.8% on year. However, GDP eased from an upwardly revised 3.2% expansion in the first quarter.
The Taiwan dollar and the Philippine peso were down 0.1% against the US dollar. The Malaysian ringgit and the South Korean won were the worst-hit currencies in early trade, falling 0.3% each against the greenback. The Indonesian rupiah also fell 0.1% against the greenback. The offshore Chinese yuan traded flat against the US unit in early trade. (Gowri Lakshmi)
India Rupee: Expected range for rupee - Aug 18
MUMBAI – Following are the expected support and resistance levels for the rupee on Monday, as forecast by leading banks and brokerages in an Informist poll:
| PARTICIPANT | SUPPORT | RESISTANCE |
| State-owned bank | 87.70 | 87.30 |
| Private-sector bank | 87.65 | 87.40 |
| Foreign bank | 87.70 | 87.25 |
| Foreign bank | 87.80 | 87.40 |
| Brokerage firm | 87.70 | 87.20 |
(Gowri Lakshmi and Pratiksha)
End
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Akul Nishant Akhoury
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