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Informist, Wednesday, Jul. 9, 2025

By Gowri Lakshmi 

MUMBAI – The rupee ended steady against the dollar, paring all losses, as exporters persistently sold dollars which offset the negative impact of a rise in the dollar index, dealers said. However, the rupee was weighed down as low risk appetite of investors were hit amid heightened uncertainty about the US tariff policies, dealers said. 

After moving in a range of over 28 paise during the day, the Indian unit settled at 85.6725 against the greenback, steady from 85.6925 a dollar Tuesday. Market participants continue to await announcement of an interim trade deal between India and the US, which was expected early this week. 

Most other Asian currencies, however, fell against the greenback due to the slight strengthening of the dollar index and as investors weighed the impact of the latest tariff-related news from Washington. Other Asian currencies fell almost 0.4% against the dollar, with the Taiwan dollar being the worst hit.  

The Indian unit opened sharply lower against the dollar at 85.8525 as banks purchased the greenback on behalf of foreign portfolio investors, who withdrew funds from domestic financial markets to move to other safe-haven as their sentiment turned jittery after US President Trump threatened to impose steeper tariffs on copper, pharmaceuticals and semiconductors.

Trump Tuesday announced that he would impose steeper tariffs of 50% on imported copper, potentially hinting at further intensification of the ongoing tariff war. He also said he would introduce tariffs on semiconductors and pharmaceauticals. A day after he slapped South Korea and Japan with 25% tariffs, Trump reiterated his threat of 10% tariffs on products from Brazil, India and other member states of the BRICS.

Following Trump's comments, the dollar index strengthened more and extended its gains Wednesday, which weighed on the rupee, dealers said. At 1530 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 97.56, broadly steady from 97.51 Tuesday and 97.52 Monday. The index rose to a high of 97.84 Tuesday.  

"There is optmism about the US-India trade deal, but Trump's constant threat on BRICS (nations) is something that investors are currently weighing, and right now... it is all uncertain," a dealer at a private-sector bank said.

The rupee also came under pressure on dollar demand from importers, who feared a further fall of the Indian currency, dealers said. The Indian unit hit a low of 85.9225 a dollar in early trade owing to dollar purchases by overseas investors and importers.

However, as soon as the rupee hit the low, exporters rushed to sell dollars, which limited the rupee from falling further, dealers said. Exporters began selling dollars when the rupee was trading at 85.88 a dollar, dealers said. A few of them also speculated that the Reserve Bank of India may have also stepped in with dollar sales, to prevent the rupee from inching toward the psychologically crucial 86-per-dollar mark. 

"Exporters did most of the heavy selling today," a currency trader at a brokerage firm said. "But some nats (nationalised banks) also sold, likely on behalf of the RBI." 

FORWARDS

The one-year dollar/rupee forward premium ended at a two-week low as a sharp decline in the rupee prompted some banks to sell dollars for forward delivery on behalf of exporters, dealers said. The rupee fell to a low of 85.9225 a dollar in the spot market earlier in the day. 

An overnight rise in the 10-year benchmark US Treasury yield also weighed on premiums, dealers said. US Treasury yield edged higher Tuesday as investors assessed the ramifications of President Donald Trump's tariff announcements, which threatened steep duties on several countries, including key allies. Forwards of a currency pair are reflective of the interest rate differential between two countries.

Market participants see strong technical support for the one-year dollar/rupee forward premium at 1.95-2.00%. At 1530 IST, the one-year exact period dollar/rupee forward premium was 1.94%, unchanged Tuesday. On an absolute basis, the premium was 166.59 paise, against 166.33 paise Tuesday. 

OUTLOOK

On Thursday, the rupee will take cues from the movement in the dollar index and crude oil prices, dealers said. Investors will closely watch any tariff related news and developments on the India-US trade policy front, dealers said. The rupee may come under pressure as importers are likely to purchase the greenback, fearing a further fall of the rupee, dealers said. They said overseas investors withdrawing funds from Indian financial markets may also put the rupee under pressure. 

However, dollar sales by exporters, who want to take advantage of the relatively higher dollar/rupee levels, may continue to provide cushion to the Indian unit, dealers said. During the day, the rupee is likely to move in the range of 85.50-85.90 against the dollar. Dealers peg key immediate technical resistance for the rupee at 85.55 against the greenback. 

India Rupee - World FX: Dlr index remains strong on Trump's new tariff plans

NEW DELHI – The dollar index remained broadly strong after US President Donald Trump Tuesday further intesified the trade war, announcing plans to impose a 50% tariff on imported copper and levies on semiconductors and pharmaceuticals. Trump also reiterated his threat of 10% tariffs on products from Brazil, India, and other members of the BRICS group of countries.

At 1555 IST, the dollar index, which measures the strength in the dollar against a basket of six major currencies, was at 97.54, against 97.51 Tuesday and 97.52 Monday. Market participants now await the release of the minutes of the US Federal Open Market Committee's meeting in June, due later in the day.  

The euro fell 0.1% against the dollar, tracking strength in the dollar index. However, losses in the currency were limited on hopes of a trade deal between the European Union and the US. European Commission President Ursula von der Leyen said on Wednesday that the European Union was working closely with Trump administration to reach a trade deal. Trump also said on Tuesday that trade talks have been going well with the European Union and China, adding that he was only days away from sending a tariff letter to the former. 

The Financial Times reported on Wednesday that European Union negotiators are closing in on a trade deal with US that would cement higher tariffs than those granted to the UK. The pound sterling was flat against the dollar. 

The Australian dollar was also steady against the US unit. Australian Treasurer Jim Chalmers said on Wednesday that the country was "urgently seeking more detail" on Trump's threat to raise tariffs up to 200% on pharmaceutical imports. The New Zealand dollar was also flat against the greenback. (Pratiksha) 

India Rupee:Forward premium falls as exporters sell fwd dlrs on rupee's fall

NEW DELHI – The one-year dollar/rupee forward premium fell to a two-week low as a sharp decline in the rupee prompted some banks to sell dollars for forward delivery on behalf of exporters, dealers said. The rupee fell to a low of 85.9225 a dollar in the spot market earlier in the day. 

"The spot (rupee) fell in the morning sharply, so some bit of exporter interest came due to that," a dealer at a private-sector bank said. "But if forward levels fall further, paying should come in."

An overnight rise in the 10-year benchmark US Treasury yield also weighed on premiums, dealers said. US Treasury yield edged higher Tuesday as investors assessed the ramifications of President Donald Trump's tariff announcements, which threaten steep duties on several countries, including key allies. Forwards of a currency pair are reflective of the interest rate differential between two countries.

Trump Tuesday said he would impose 50% tariff on imported copper and soon introduce long-threatened levies on semiconductors and pharmaceuticals, further intensifying the trade war. "Premiums have been actively tracking the US. The next big breakout in levels will be only after the Fed (US Federal Reserve) goes for a rate cut," a dealer at a state-owned bank. 

Market participants see strong technical support for the one-year dollar/rupee forward premium at 1.95-2.00%. At 1430 IST, the one-year exact period dollar/rupee forward premium was 1.93%, against 1.94% Tuesday. On an absolute basis, the premium was 166.60 paise, against 166.33 paise Tuesday.  (Pratiksha)

India Rupee: Off lows on exporters' dollar sales; rise in dollar index weighs

MUMBAI – The rupee came off its day's low against the dollar as banks sold the greenback on behalf of exporters, dealers said. However, the rise in the dollar index amid heightened worries about the US tariffs continued to weigh on the Indian currency, dealers said.

"Exporters have sold significantly today, the rupee erased some off the losses because of them," a currency trader at a brokerage firm said. Some dealers also speculated that the Reserve Bank of India also sold the greenback, which prevented the rupee from inching toward the psychologically crucial 86-per-dollar mark.

The rupee hit a low of 85.9225 against the greenback in early trade as banks purchased dollars on behalf of foreign portfolio investors, who withdrew funds from domestic financial markets as US tariff fears triggered low risk appetite, dealers said. However, a further fall in the rupee was prevented as exporters stepped in to take advantage of the relatively higher dollar/rupee levels, dealers said. Exporters began selling dollars at 85.88 a dollar and below levels. 

However, the rupee remains sharply down against the dollar, compared with its previous close, as the strength in dollar index continued to weigh on it, dealers said. The dollar index rose, partly on safe-haven flows, dealers said. The dollar also gained as the Japanese yen tumbled after US President Donald Trump announced a 25% tariff on Japanese goods Monday. 

At 1341 IST, the dollar index, which measures the strength of the dollar, against a basket of six major currencies, was at 97.64, slightly up from 97.51 Tuesday and 97.52 Monday. The index rose to a high of 97.84 Tuesday. 

For the rest of the day, the rupee is seen moving in a range of 85.65 to 85.95 against the greenback. Dealers peg key technical support for the rupee at 85.95 a dollar.  (Gowri Lakshmi)

India Rupee - Asia FX: Most down; dollar rises as US tariff war escalates

MUMBAI – Most Asian currencies fell against the dollar as the latter extended gains Wednesday because of safe-haven purchases as investors are worried that a steeper tariff on copper imports will escalate the tariff war. US President Donald Trump Tuesday said he would impose a 50% tariff on imported copper and will soon introduce import duties on semiconductors and pharmaceuticals.

At 1025 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 97.66, slightly up from 97.51 Tuesday and 97.52 Monday. The Philippines peso was down 0.4% and the South Korean won was down 0.2%.

The ringgit fell 0.3% against the greenback ahead of the monetary policy decision by the Malaysian central bank. Bank Negara Malaysia is widely expected to lower its benchmark rates for the first time in five years. Market participants expect the central bank to cut the benchmark lending rates by 25 basis points.

The Indonesian rupiah was down 0.3% against the US dollar. Jakarta will immediately resume tariff negotiations with Washington to reduce the 32% tariff that Trump threatened to impose starting August. Coordinating Minister for Economic Affairs Airlangga Hartarto is in US to meet his counterpart.

The Chinese yuan was flat against the dollar. China's chief of state planner said he expects the economy to exceed $19.5 trillion in 2025. Zheng Shanjie, chair of the National Development and Reform Commission, said foreign technology restrictions would only strengthen China's self-reliance and its ability to be innovative.

The Taiwan dollar was down 0.2% against the greenback after data showed that inflation in Taiwan slowed to 1.37% in June, logging the smallest on-year rise since May 2020.

The Thai baht fell 0.2% against the US unit. The minutes of Bank of Thailand's Jun. 25 monetary policy meeting showed that the country's exports are expected to fall sharply in the second half of the year due to the sweeping US tariffs. "Targeted measures in conjunction with business adaptation were deemed necessary," the minutes published on Wednesday said. Bank of Thailand held rates steady at 1.75% at its June meeting.  (Gowri Lakshmi)

India Rupee: Technical levels for rupee - Jul 9

MUMBAI – At 1048 IST, the rupee was at 85.8450 per dollar. At 0900 IST, the rupee was at 85.8525 a dollar, against the previous close of 85.6950. Following are the key support and resistance levels for the rupee as provided by leading banks and brokerages:

(Gowri Lakshmi)

India Rupee: Slumps on low risk appetite as US tariff war intensifies

MUMBAI - The rupee slumped against the dollar Wednesday as investor sentiment was dented on latest tariff announcements by the US President Donald Trump that hint at an intensifying tariff war, dealers said. However, a further fall in the rupee was likely prevented as exporters sold the greenback, dealers said. 

"Tariff situation has intensified. FPIs are moving out as uncertainty prevails," a dealer at a private sector bank said. "The threat on copper and pharmaceuticals has likely led to the sharp gap in the opening (from previous)," another currency trader at a brokerage firm said. 

The rupee came under pressure as banks purchased dollars on behalf of foreign portfolio investors, who withdrew funds from Indian financial markets and moved to other safe-haven assets amid rising worries about US tariff policies, dealers said.

Trump Tuesday threatened to impose a steeper tariff on copper. He also said he would impose a sweeping 50% tariff on the long-threatened semiconductors and pharmaceuticals, triggering low risk appetite of investors amid heightened policy uncertainty by the US, dealers said. However, he deffered the implementation of the reciprocal tariffs to Aug. 1, following advice from US Treasury Secretary Scott Bessent. 

Trump also reiterated his threat of 10% tariff on Brazil, India and other BRICS member states. This has led to panic amongst investors, dealers said. Market participants' views remain mixed about the threat to BRICS countries as India-US bilateral trade deal is yet to be announced and traders are optimistic about it, dealers said. However, some dealers said the rupee also came under pressure as investors weighed the impact of the 10% tariff. 

The rupee was also weighed down by the strength in the dollar index, partly because of safe-haven flows and due to a weakening of the Japanese yen, dealers said. At 0946 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 97.71, slightly up from 97.51 Tuesday and 97.52 Monday. 

The fall in the rupee was limited as banks sold the greenback on behalf of exporters, who wanted to take advantage of the relatively higher dollar/rupee levels, dealers said. Exporters likely sold dollars at 85.88 a dollar and below levels, dealers said. "I think RBI (Reserve Bank of India) will step in 86.02 (a dollar), but the real question is, how long will they protect?," a dealer at another private sector bank said. 

During the day, the rupee is seen moving in a range of 85.75 and 86.00 against the greenback. Dealrs peg immediate technical support for the Indian unit at 86.00 a dollar.  (Gowri Lakshmi)

India Rupee: Expected range for rupee - Jul 9

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: 

(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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