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Informist, Tuesday, Jun. 24, 2025

By Gowri Lakshmi 

MUMBAI – The rupee surged past the psychologically crucial 86-per-dollar mark and posted the biggest single day gain in a month owing to improved investor sentiment after the declaration of ceasefire between Iran and Israel, dealers said. Foreign fund inflows into Indian financial markets coupled with a decline in the dollar index also provided strong support for the rupee, dealers said. 

"Today's rise was based on the truce and ease in geopolitical tensions. This week also has a lot of flows, everything is in support of rupee as of now," a dealer at a brokerage firm said. After rising to a one-week high, the Indian unit settled at 85.9750 a dollar, jumping from its previous close of 86.7475. The Indian currency moved 35 paise during the day and hit a high of 85.9125, its highest level since Jun. 17.

Most other Asian currencies also surged against the dollar owing to improved investor sentiment in the wake of de-escalation in geopolitical tensions. Other Asian currencies rose 0.1-1.5%, with the South Korean won being the biggest gainer followed by the Malaysian ringgit.

The rupee logged its best performance at the opening in a month, starting the day at 86.1100 a dollar, around 64 paise up from its previous close, after US President Donald Trump Monday announced a ceasefire between Israel and Iran, dealers said. Trump announced "a complete ceasefire" between the countries, potentially bringing the 12-day conflict to an end. 

"On the assumption that everything works as it should, which it will, I would like to congratulate both Countries, Israel and Iran, on having the Stamina, Courage, and Intelligence to end, what should be called, 'THE 12 DAY WAR'," Trump posted on Truth Social. Following which, crude oil prices fell as tensions about a supply-shock eased. 

At 1530 IST, the August Brent Crude contract on the Intercontinental Exchange was at $69.38 per barrel, down from $71.48 per barrel Monday and sharply lower than $77.01 Friday. A fall in crude oil prices eases pressure on India's import bill as crude is one of the largest imported goods by India.

Later in the day, Trump said in a social media post that a ceasefire between the two countries is in effect and asked both the parties to not violate the truce. Israeli Prime Minister Benjamin Netanyahu also announced the ceasefire and reiterated that his government would respond "forcefully" to any violation of the ceasefire.

However, shortly after the truce came into effect, Israel alleged that Iran attacked with missiles and sirens were heard in northern Israel, adding that it would respond "with force". "In light of the severe violation of the ceasefire carried out by the Iranian regime, we will respond with force," Israel Defence Forces also said in a post on X. However, Iran denied Israel's claims, according to some media reports.

In the latest update, Iranian Supreme Natioanl Security Council has released a statement about "imposing the halt of the war" on Israel and its "terrorist supporters". The council also warned that "any further aggression will be met with a decisive, firm, and timely response by Iran".

"Uncertainty is definitely there. Market is waiting for more clarity whether this truce will stay or not, but given the announcement, the market has moved solely on improvement in general sentiment. Moreover, the rupee was driven by flows into IPOs which are open," the dealer at the brokerage firm said.

Banks sold the greenback on behalf of foreign portfolio investors and foreign fund inflows relating to IPOs, which provided further boost for the rupee, dealers said. The public issues of Kalpataru Ltd., Globe Civil Projects Ltd., Ellenbarrie Industrial Gases Ltd. are open and will close Thursday. After rising as much as 1.3%, both the benchmark indices, the BSE Sensex and the Nifty 50, trimmed some of their gains and ended 0.2% and 0.3% higher, respectively.

Further, the rupee rose to the day's high as the dollar index declined to an over-one-week low of 97.93 after US Federal Reserve policymaker Michelle Bowman Monday called for faster interest rate cuts by the central bank. Bowman's dovish comments came at a time when the US labour market was experiencing a fragile and softening phase and led to traders now seeing an increased probability of a rate cut in July. According to the CME FedWatch tool, trader now see a 22.7% probability of a rate cut in July, up from 14.5% Monday. 

At 1530 IST, the dollar index, which measures the strength in the dollar against a basket of six major currencies, was at 98.06, broadly steady from 98.35 Monday and down from 98.77 Friday. 

However, the rise in the rupee were capped as banks purchased the greenback, on behalf of importers, who wanted to take advantage of the relatively lower dollar/rupee levels, dealers said. A few oil marketing companies also bought dollars noting a fall in crude oil prices, dealers said. 

FORWARDS 

The one-year exact-period dollar/rupee forward premium was steady Tuesday after falling in early trade due to a sharp rise in the spot rupee, dealers said. Importers purchased dollars for forward delivery at relatively lower dollar/rupee premiums and as they waited for the Israel-Iran ceasefire to cement, dealers said. This, they said, pushed forward premiums higher from lows of early trade.

It fell to 1.84%, on an annualised basis, before importers' forward dollar purchases lifted premiums, dealers said. A few importers purchased the forward dollars to take advantage of the relatively lower premium levels, amid geopolitical uncertainty. Further, banks also purchased forward dollars as US Federal Reserve policymaker Michelle Bowman said Monday that the US central bank should cut interest rate faster.

At 1530 IST, the premium on the one-year, exact-period dollar/rupee forward contract was 161.53 paise, against 164.76 paise at Monday's close. On an annualised basis, the premium was 1.87%, little changed from Monday's 1.90%. 

OUTLOOK 

On Wednesday, the rupee will take cues from the movement in crude oil prices and offshore dollar index, dealers said. Market participants will closely watch the developments in West Asia and any comment by Trump on tariffs or the Israel-Iran conflict. 

Dealers expect the rupee to be supported by foreign fund inflows, likely relating to multiple IPOs opened for subscription. However, the rupee may come under some pressure as importers are likely to purchase the greenback, to take advantage of the relatively lower dollar/rupee levels, dealers said. 

During the day, the rupee is seen moving in a range of 85.90-86.40 against the greenback. Dealers peg immediate technical resistance for the Indian currency at 85.90 a dollar.

India Rupee - World FX: Dlr falls to 1-wk low; mkt eyes ECB Lagarde speech

MUMBAI – The dollar index fell to an over-one-week low of 97.93 after US Federal Reserve policymaker Michelle Bowman Monday called for faster interest rate cuts by the central bank, leading to rising expectations of a rate cut as early as the July meeting of the US Federal Open Market Committee. Following Bowman's comments, traders now see a 22.7% probability of a rate cut, up from 14.5% Monday, according to the CME FedWatch tool.

Bowman's dovish comments came at a time when the US labour market is experiencing a fragile and softening phase. "Should inflation pressures remain contained, I would support lowering the policy rate as soon as our next meeting in order to bring it closer to its neutral setting and to sustain a healthy labour market," Bowman said. "We should also recognise that downside risks to our employment mandate could soon become more salient, given recent softness in spending and signs of fragility in the labour market." 

The dollar was also weighed down as investors remain concerned about Iran's retaliation to US attacks on the country's nuclear sites Sunday. Late Monday, Iran launched missiles at a US military base in Qatar. The attack was confirmed by Iranian military and state media. 

At 1530 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 98.05, broadly steady from 98.35 Monday and down from 98.77 Friday.

Following the decline in the dollar index, the Japanese yen surged 0.7% against the greenback and the Swiss franc was up 0.2%, probably on safe-haven demand. The Australian dollar was up 0.7% and the New Zealand dollar was up 0.9% against the US currency. 

The euro was up 0.1% against the greenback after business sentiment improved in Germany, the eurozone's largest economy. The ifo Institute's survey showed the business climate index of Germany rose to 88.4 in June from 87.5 in May and was also higher than the analyst estimate of 88.2 in a Reuters poll. Market participants now await European Central Bank President Christine Lagarde's speech later in the day.

The pound sterling rose 0.5% ahead of Bank of England Governor Andrew Bailey's speech due later in the day. The Canadian dollar rose 0.1% against the greenback. Market participants await Canada's inflation print for May, also due later in the day. Analysts forecast Canada's inflation rate to remain unchanged from April at 1.7%.  (Gowri Lakshmi)

India Rupee: Premium steady; market waits for Israel-Iran ceasefire to sustain

MUMBAI – The one-year exact-period dollar/rupee forward premium was steady Tuesday after falling in early trade due to a sharp rise of the spot rupee, dealers said. Importers purchased dollars for forward delivery at relatively lower dollar/rupee premiums and as they waited for the Israel-Iran ceasefire to cement, dealers said. This, they said, pushed forward premiums higher from lows of early trade.

"Right now, the trade is not based on where the directions of the yield are, market is eagerly waiting for further cue or a clarity. Truce has been announced but whether the truce will be held or not is what the market is worried about," a currency trader at a brokerage firm said. 

Investors' sentiment improved after US President Donald Trump announced a ceasefire between Israel and Iran. In a social media post, Trump said a ceasefire between the two countries is in effect and asked both the parties not to violate the truce. However, few hours after the truce came into effect, Israel accused Iran of violating it. 

In the latest update, Iranian Supreme Natioanl Security Council has released a statement about "imposing the halt of the war" on Israel and its "terrorist supporters". The council also warned that "any further aggression will be met with a decisive, firm, and timely response by Iran".

This lifted the rupee sharply higher in the spot market. The Indian currency opened around 64 paise higher from the previous day's close, the best performance at open in a month. Consequently, forward premiums also fell in early trade. It fell to 1.84%, on an annualised basis, before importers' forward dollar purchases lifted premiums, dealers said. "In the morning, premiums were down because spot (dollar/rupee) rate had come down, and then paying started as importers hedged," a dealer with a foreign bank said. 

A few importers purchased the forward dollars to take advantage of the relatively lower premium levels, amid geopolitical uncertainty. Further, banks also purchased forward dollars as US Federal Reserve policymaker Michelle Bowman said Monday that the US central bank should cut interest rate faster.

This led to rising expectations of a rate cut by the US Federal Open Market Committee as early as July. Following her comments, the traders now price in a 22.7% chance of a rate cut, up from 14.5% seen Monday, according to the CME FedWatch tool. Forwards of a currency pair are reflective of the interest rate differential between the two countries.

The yield on benchmark 10-year US Treasury note fell following Bowman's comments. The yield on the 10-year US Treasury note ended 4 basis points down at 4.34%. At 1500 IST, the premium on the one-year, exact-period dollar/rupee forward contract was 162.01 paise, against 164.76 paise at Monday's close. On an annualised basis, the premium was 1.88%, little changed from Monday's 1.90%.  (Gowri Lakshmi)

India Rupee: Stays sharply up on FX inflows; importers' dollar buys cap gains

MUMBAI – The rupee remained sharply up against the dollar Tuesday as banks sold the greenback, likely for investment by foreign funds into Indian financial markets and initial public offerings of domestic companies, dealers said. However, the gains of the rupee were capped as importers purchased the greenback, dealers said.

"Good flows are there, the ease in West Asia tension also supports the rupee," said a dealer at a brokerage firm. "But some importer (dollar) buying is there, not aggressive but actively buying at every dip (in dollar/rupee)." The rupee rose to one-week high of 86.0700 early in the trade as investor sentiment improved after US President Donald Trump announced a ceasefire between Israel and Iran.

In a social media post, Trump said a ceasefire between the two countries is in effect and asked both parties to not violate the truce. Trump's post came over an hour after Iran launched strikes on Israel. The governments of Israel and Iran are yet to confirm the ceasefire.

The rupee was lifted further by likely dollar sales by banks on behalf of foreign portfolio investors looking to invest in domestic financial markets, dealers said. Some foreign fund inflows were also likely related to initial public offerings, according to some dealers. The public issues of Kalpataru Ltd., Globe Civil Projects Ltd., Ellenbarrie Industrial Gases Ltd. are open and will close Thursday. At 1254 IST, the benchmark share indices, the Nifty 50 and BSE Sensex, were up 1.2% each.

The dollar index also fell to an over one-week low of 97.69 after US Federal Reserve policymaker Michelle Bowman Monday made a case for faster interest rate cuts. Bowman's dovish comments came at a time when the US labour market is experiencing a fragile and softening phase. This led to rising expectations of a rate cut as early as the July US Federal Open Market Committee meeting. Following her comments, the traders now see a 22.7% probability of a rate cut, from 14.5% on Monday, according to the CME FedWatch tool.

At 1304 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 98.08, broadly steady from 98.35 Monday and down from 98.77 Friday.

For the rest of the day, the rupee is seen moving in a range of 86.00-86.30 against the dollar. Dealers peg key technical resistance for the rupee at 86.05 against the greenback.  (Gowri Lakshmi)

India Rupee: Technical levels for rupee - Jun 24

MUMBAI – At 1015 IST, the rupee was at 86.1900 per dollar. At 0900 IST, the rupee was at 86.1100 a dollar, against the previous close of 86.7450. Following are the key support and resistance levels for the rupee as provided by leading banks and brokerages:

(Gowri Lakshmi and Sourabh Kumar)

India Rupee - Asia FX: Most up; dollar falls on Fed policymaker's dovish remark

MUMBAI – Most Asian currencies rose sharply against the US dollar as the dollar index fell to a one-week low after US Federal Reserve policymaker Michelle Bowman Monday made a case for faster interest rate cuts. Bowman's dovish comments come amid a time when the US labour market is experiencing a fragile and softening phase. 

"Should inflation pressures remain contained, I would support lowering the policy rate as soon as our next meeting in order to bring it closer to its neutral setting and to sustain a healthy labor market," Bowman said. "We should also recognise that downside risks to our employment mandate could soon become more salient, given recent softness in spending and signs of fragility in the labor market," she added. 

The US dollar was further weighed down after Iran retaliated to US attacks on Iranian nuclear sites on Sunday, by launching missiles at a US military base in Qatar Monday. The attack was confirmed by Iranian military and state media. 

At 0932 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 98.09, broadly steady from 98.35 Monday and down from 98.77 Friday. The index fell to 98.09 in early trade, the lowest level since Jun. 17. 

The South Korean won surged 1.1% against the greenback. Data published earlier in the day showed South Korea's consumer sentiment hit a three-year high, with the the composite consumer sentiment index rising sharply to 108.7 in June from 101.8 in May. The surge in consumer optimism was driven by confidence in the newly-elected president's commitment to addressing sluggishness in South Korea's economy. 

South Korea's Trade Minister Yeo Hankoo, after his first meeting with US counterparts, reitrated the country's call to be exempted from aggressive tariffs by the US. Both sides reaffirmed their shared commitment to swiftly reaching a mutually beneficial agreement, without giving a specific timeline.

The Philippines' peso rose 1.2% against the greenback. The Malaysian ringgit was up 0.9% against the greenback while the Indonesian rupiah and Taiwan dollar were up 0.7%. Data published Monday showed Taiwan's jobless rate fell to 3.34% in May from 3.36% the previous month, the lowest level since November 2000. 

The Chinese yuan traded flat against the US currency. Bucking the trend, the Thai baht was down 0.1% against the greenback.  (Gowri Lakshmi)

India Rupee: Surges as Trump announces ceasefire between Israel, Iran

MUMBAI – The rupee surged against the dollar early Tuesday as investors' risk appetite improved after US President Donald Trump announced a ceasefire between Israel and Iran, dealers said. The Indian currency opened around 64 paise higher from the previous day's close, the best performance at open in a month.

"After Trump's ceasefire comments all markets went higher, and I am thinking we might see some flows, taking the rupee to around 85.85," a dealer with a foreign bank said. US President Donald Trump said in a post on Truth Social that he brokered a ceasefire between Israel and Iran.  "CONGRATULATIONS TO EVERYONE! It has been fully agreed by and between Israel and Iran that there will be a Complete and Total CEASEFIRE (in approximately 6 hours from now...)," he said.

Reports said that an Iranian official had confirmed the ceasefire with Israel. However, Iran's foreign minister said hostilities would continue untill Israel stopped its attacks, as per reports.

The rupee rose to 86.0750 a dollar in early trade Tuesday, the highest in a week. A few importers purchased dollars, noting relatively lower dollar/rupee rates. However, others waited for a more lucrative level, dealers said. A few dealers said the rupee also received support from likely foreign fund inflows into Indian equities, as investors' risk appetite improved post Trump's announcement of Israel-Iran ceasefire. 

After the announcement, crude oil prices came sharply down. At 0931 IST, the August Brent crude contract on the Intercontinental Exchange was at $69.69 per barrel, sharply lower from its previous close of $71.48 per barrel and $77.01 per barrel Friday. A fall in oil prices supports the rupee, as it reduces the import bill of India, given that the commodity is a major import item.

The dollar index came down, which supported the rupee, dealers said. The dollar index, which measuures the strength of the greenback against a basket of six major currencies, was 98.09 at 0935 IST, down from Monday's 98.35 and 98.77 Friday. For the rest of the day, the rupee is seen moving in a range of 86.00-86.30 against the dollar. Dealers peg key technical resistance for the rupee at 86.05 against the greenback.  (Sourabh Kumar)

India Rupee: Expected range for rupee - Jun 24

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

(Gowri Lakshmi and Sourabh Kumar)

End

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

Edited by Akul Nishant Akhoury

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