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Informist, Monday, Sept. 15, 2025

By Pratiksha

NEW DELHI – The rupee ended higher against the dollar for the second consecutive trading day on Monday but pared a signficiant portion of its gains as banks stepped in to buy dollars on behalf of importers, dealers said. Broad-based weakness in the dollar index and some exporters' dollar sales supported the Indian unit, they said. 

"There was two-sided move (in the rupee) but volumes were not much. Some corporate selling (of dollars) came but bids (buying of dollars) were also there," a dealer at a private sector bank said. After rising to 88.1450 a dollar during the day, the Indian currency settled at 88.2100 on Monday, against 88.2750 on Friday. 

The rupee began the day on a muted note, opening broadly steady against the dollar, due to lack of significant cues and as traders await the outcome of the US Federal Open Market Committee meeting, due Wednesday, dealers said. The US Federal Reserve is widely expected to cut rates by 25 basis points after holding it steady at 4.25-4.50% since December. 

Fed funds futures traders are now pricing in a 94.2% chance of the Fed cutting interest rates by 25 bps at the upcoming meeting, with a 5.8% probability of a jumbo 50-bps cut, CME FedWatch showed. "A 25 bps cut is discounted but if FOMC decides to play catchup on growth and goes for a 50 bps cut, we should see a knee-jerk sort of appreciation in the rupee," a dealer at another private sector bank said. "I am expecting 87.70-87.80 kind of levels holding in that case."

The rupee was steady against the dollar during the first half of the trade. However, some banks stepped in to sell dollars on behalf of exporters, in order to make the most of the current dollar/rupee levels, as they expect the rupee to appreciate after the US central bank's policy outcome on Wednesday, which supported the Indian unit, dealers said. 

Further, the dollar index fell during European trade, which also provided support to the Indian unit, dealers said. At 1530 IST, the dollar index, which measures the strength in the dollar against a basket of six major currencies, was at 97.43, against 97.62 Friday and 97.50 Thursday. 

"The selling (of dollars) was rooted in the broad dollar softness, some exporter selling (of dollars) and I think there was some hangover from what RBI (Reserve Bank of India) supplied last week," a dealer at a foreign bank said. The rupee fell to a record low of 88.4550 on Thursday, but the central bank intervened through dollar sales and prevented the Indian unit from falling further, according to dealers. 

However, dealers said volume in the currency market was lower than usual as traders refrained from placing large bets ahead of the US Federal Open Market Committee meeting. Market participants will  watch out for Fed officials' dot-plot projections for rates and guidance from Fed Chair Jerome Powell on the extent and pace of any further easing. 

The rupee recieved a further boost after data released Monday showed India's merchandise exports rose on year in August even as US tariffs on Indian goods came into effect during the month. India's merchandise trade deficit for August came down to $26.49 billion from $35.64 billion a year ago.

Investors' risk appetite also improved after India's chief negotiator Rajesh Agrawal said Monday New Delhi and Washington will hold the next round of talks on the proposed bilateral trade agreement on Tuesday in the national capital, supporting the Indian currency, dealers said. The US has slapped an additional 25% punitive tariff on Indian goods, on top of a 25% reciprocal tariff, citing New Delhi's continued purchases of Russian crude oil.

However, gains in the Indian currency ran into dollar demand from importers, who wanted to make the most of the relatively lower dollar/rupee levels, dealers said. "...markets reacted positively to news of a US team visiting India for trade talks. Buying (of dollars) was seen on every minor dip, keeping the dollar/rupee supported throughout the session," Jateen Trivedi, VP research analyst - commodity and currency at LKP Securities, said in a note. "Focus now shifts to the Fed's policy outcome on Wednesday and updates on trade discussions, which will drive the next leg of movement." 

FORWARDS

The one-year dollar/rupee forward premium ended largely steady Monday as banks' forward dollar purchases on behalf of importers offet the impact of a rise in US Treasury yields, dealers said. US Treasury yields rose sharply ahead of the outcome of the US Federal Open Market Committee's meeting. 

Forwards of a currency pair are reflective of the interest rate differential between the two countries. The 10-year US bond yield rose to 4.06% Friday against 4.01% Thursday. Meanwhile, some banks bought dollars for forward delivery, noting the relatively lower levels, which supported the forward premiums, dealers said. So far this month, the one-year forward premium has risen almost 15 bps. 

At 1530 IST, the one-year exact period dollar/rupee forward premium was 2.33%, against the previous close of 2.34%. On an absolute basis, the premium was 205.42 paise, against 206.31 paise Friday.

OUTLOOK

On Tuesday, the rupee will take cues from movement in the dollar index ahead of the FOMC meeting outcome, dealers said. Market participants will keep a close eye on developments related to India-US trade deal negotiations on Tuesday. "Everything now depends on what kind of news comes out these trade talks," a dealer at a state-owned bank said. "If it is in our favour, things can change drastically for rupee."

However, a dealer at a brokerage firm said that if the trade deal negotiations do not turn out to be positive for India, the depreciation pressure on the rupee may further gain steam. Most dealers expect importers to continue buying dollars on fear that the Indian unit may depreciate in the near term amid worries related to US tariffs on India, weighing on the Indian unit.

However, they expect the central bank to intervene through dollar sales to prevent a runaway depreciation in the domestic unit. They have pegged key technical resistance for the rupee at 88.10 a dollar and support at 88.50. During the day, the rupee may move in a range of 88.10 and 88.50 against the dollar.

India Rupee: Up amid dull volume as exporters sell dlrs; FOMC outcome eyed

MUMBAI – The rupee rose against the dollar amid lacklustre volume as banks sold dollars, likely on behalf of exporters, dealers said. A broadly weak dollar index also supported the Indian unit, they said. "The banks are selling (dollars) for exporters, there is some profit booking by them (exporters)," a dealer at a brokerage firm said.

Banks sold dollars for exporters in order to make the most of the current dollar/rupee levels, as they expect the rupee to appreciate after the US Federal Reserve's policy outcome on Wednesday, where the Fed is widely expected to cut rates by 25 basis points. The benchmark rate has been steady at 4.25-4.50% since December.

The dollar index remained broadly weak ahead of the Fed's policy outcome. Market participants will also closely monitor Fed officials' dot-plot projections for rates and guidance from Fed Chair Jerome Powell on the extent and pace of any further easing. "If there is anything more than 25 bps cut (by the Fed), then some selling (of dollar) might take place," a dealer at a private-sector bank said.

Fed funds futures traders are now pricing in a 96.2% chance of the Fed cutting interest rates by 25 basis points at the upcoming meeting, with a 3.8% probability of a jumbo 50-bps cut, CME FedWatch showed. At 1345 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 97.55, against 97.62 Friday and 97.50 Thursday. The index fell to 97.50 during the day. 

Meanwhile, volume in the currency market was lower than usual as market participants await the outome of the US Federal Open Market Committee meeting, dealers said. "There is very low activity in the market today. Volumes are quite low too," the dealer at a brokerage firm said.

For the rest of the day, the rupee is seen moving in a range of 88.10-88.50 against the greenback. Dealers peg key technical resistance for the rupee at 88.10 a dollar.  (Rati Chaphekar)

India Rupee: Premium steady as importers' fwd dollar buys offset US yld rise

NEW DELHI – The one-year dollar/rupee forward premium was largely steady Monday as banks' forward dollar purchases on behalf of importers offet the impact of a rise in US Treasury yields, dealers said. "Forwards fell during open, tracking US and then some paying on dips (in forward premium level) came in," a dealer at a foreign bank said. "I think we will see two-way interest now, since most of the US data is now done and levels will start consolidating."

US Treasury yields rose sharply ahead of the outcome of the US Federal Open Market Committee's meeting, due Wednesday. Forwards of a currency pair are reflective of the interest rate differential between the two countries. The 10-year US bond yield rose to 4.06% Friday against 4.01% Thursday. 

Meanwhile, some banks bought dollars for forward delivery, noting the relatively lower levels, which supported the forward premiums, dealers said. So far this month, the one-year forward premium has risen almost 15 bps.  

Market participants now keenly await the US Federal Reserve's policy outcome, where it is widely expected to cut rates by 25 basis points after holding it steady at 4.25-4.50% since December. "Market has priced in a 25 bps cut (by the Fed). It is only if 50 bps cut happens we'll see the market moving significantly," a dealer at a private-sector bank said. 

Fed funds futures traders are now pricing in a 96.4% chance of the Fed cutting interest rates by 25 bps at the upcoming meeting, with a 3.6% probability of a jumbo 50-bps cut, CME FedWatch showed. At 1305 IST, the one-year exact period dollar/rupee forward premium was 2.34%, unchanged against the previous close. On an absolute basis, the premium was 205.92 paise, against 206.31 paise Friday. (Pratiksha)

India Rupee: Technical levels for rupee - Sept 15

MUMBAI – At 1115 IST, the rupee was at 88.2800 per dollar. At 0900 IST, the rupee was at 88.2525 a dollar, against its previous close of 88.2750. Following are the key support and resistance levels for the rupee as provided by leading banks and brokerages:

(Rati Chaphekar)

India Rupee: Steady on lack of significant cues; FOMC meet outcome awaited

India Rupee: Steady on lack of significant cues; FOMC meet outcome awaited

MUMBAI – The rupee was steady against the dollar Monday due to lack of significant cues and as traders await the outcome of the US Federal Open Market Committee meeting, due Wednesday, dealer said. The Indian currency opened at 88.2525 a dollar, broadly unchanged from 88.2750 on Friday.

"I don't think there will be any movement prior to FOMC meeting. Market will react in trading session post FOMC meeting," a dealer at a state-owned bank said. "Also, there are no special events in these 2-3 days."

The dollar index was broadly steady ahead of the Federal Reserve's policy outcome, where it is widely expected to cut rates by 25 basis points. The benchmark rate has been steady at 4.25-4.50% since December. Market participants will also watch out for Fed officials' dot-plot projections for rates and guidance from Fed Chair Jerome Powell on the extent and pace of any further easing.

Fed funds futures traders are now pricing in a 96.2% chance of the Fed cutting interest rates by 25 basis points at the upcoming meeting, with a 3.8% probability of a jumbo 50-bps cut, CME FedWatch showed. At 0935 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 97.58, against 97.62 Friday and 97.50 Thursday.

However, amidst the uncertainty over the India-US trade deal, dealers expect importers to buy dollars around current dollar/rupee levels on fear that the Indian unit may depreciate going ahead. The rupee had fallen to a record low of 88.4550 a dollar on Thursday.

For the rest of the day, the rupee is seen moving in a range of 88.10-88.50 against the greenback. Dealers peg key technical support for the rupee at 88.50 a dollar.  (Rati Chaphekar)

India Rupee - Asia FX: Mixed ahead of FOMC meet; yuan up despite weak data

MUMBAI - Asian currencies traded on a mixed note against the dollar Monday as market participants await the outcome of the US Federal Open Market Committee's meeting, due Wednesday, where it is widely expected to cut rates by 25 basis points. The benchmark rate has held steady at 4.25%-4.50% since December.

Market participants also keenly await Fed officials' dot-plot projections for rates and guidance from Fed Chair Jerome Powell on the extent and pace of any further easing. Fed funds futures traders are now pricing in a 96.4% chance of the Fed cutting interest rates by 25 bps at the upcoming meeting, with a 3.6% probability of a jumbo 50-bps cut, CME FedWatch showed. At 0920 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 97.66, against 97.62 Friday and 97.50 Thursday.

The Chinese yuan rose 0.1% against the dollar despite data released Monday showing China's factory output growth slowed to its weakest pace in a year in August, while retail sales declined to a nine-month low. China's industrial output in August grew 5.2% on year, slowing from the 5.7% increase July and missing forecasts of 5.7% growth in a Reuters poll. Retail sales grew 3.4% in August from a 3.7% rise in the previous month. However, the People's Bank of China is likely to resist a near-term easing in policy as it grapples with a dilemma of providing a boost to the slowing economy and avoid over-heating of the already booming stock market, reports said. 

The South Korean won rose 0.5% against the dollar as the trade ministry said that top trade envoy Yeo Han-koo is heading to the US on Monday for follow-up tariff negotiations. The country has been struggling to overcome obstacles to finalise a trade deal agreed in July. 

The Thai baht fell 0.1% against the greenback while the Taiwan dollar fell 0.2%. The Philippine peso fell 0.3% against the dollar after data Friday showed the country's outstanding external debt jumped to a record $148.87 billion as of end-June amid the weakening of the US dollar. The Indonesian rupiah fell 0.2% against the greenback.  (Rati Chaphekar)

India Rupee: Expected range for rupee - Sept 15

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: 

(Pratiksha and Rati Chaphekar)

End

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

Edited by Akul Nishant Akhoury

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