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Informist, Wednesday, Oct. 29, 2025

 

By Rati Chaphekar 

 

MUMBAI – The rupee reversed all its early losses and ended higher against the dollar Wednesday as US President Donald Trump's comment fuelled optimism of a trade deal between Washington and New Delhi coming through soon, dealers said. Trump Wednesday said he is ready for a trade deal with India. Some state-owned banks' dollar sales earlier in the day, likely on behalf of the Reserve Bank of India, also supported the Indian unit, they said.  

 

"The market has become very sensitive to any news on trade deal," a dealer at a private-sector bank said. "This comment came from Trump himself, so the market was bound to react to it."

 

After hitting a low of 88.3450 a dollar earlier in the day, the rupee settled at 88.1950 a dollar, almost 0.1% higher from the previous close of 88.2650. The Indian currency traded in a range of 20 paise during the day.

 

The rupee fell in early trade as banks rushed to buy dollars on behalf of importers, who were wary of the Indian unit falling further in the near term, dealers said. The Indian unit had unexpectedly fallen below the 88-per-dollar mark and slumped 0.5% against the dollar on Monday. Some banks also bought dollars for importers and oil marketing companies, who wanted to meet their month-end payment needs, they said.

 

However, some state-owned banks sold dollars, likely on behalf of the Reserve Bank of India, which prevented the Indian currency from falling further, dealers said. The RBI likely sold dollars around 88.34 a dollar, they said.

 

The Indian unit's losses did not sustain for too long also as Trump's comments spurred hopes of a trade deal between India and the US. "...I'm doing a trade deal with India and have great respect and love for Prime Minister Narendra Modi...we have a great relationship," he said at the APEC CEOs luncheon in South Korea. In August, the US imposed an import tariff of 50% on Indian goods, half of which is a penalty for purchasing crude oil from Russia.

 

"Even before Trump's comment came out, the rupee had reversed its course because of aggressive selling by the nationalised banks," a dealer at a state-owned bank said. "I think that even without the trade-deal news, rupee would have ended around the similar level. The news just made RBI's job easier."

The dollar index rose Wednesday on optimism that the US and China are on track to sign a trade deal, which weighed on the Indian unit, dealers said. The index also rose as uncertainty around the US government shutdown made investors flock towards the safe-haven asset. The prolonged US government shutdown, which has now entered its fifth week and is showing no signs of ending, has halted the release of key economic data, keeping the market deprived of any cues on the Fed's future rate actions. 

 

Market participants also exercised caution ahead of the US Federal Open Market Committee's meeting decision, due later in the day. Markets have fully priced in a 25-basis-point rate cut by the US Fed on Wednesday. Traders will keenly watch out for commentary by Fed Chair Jerome Powell after the FOMC meeting for cues on the central bank's future rate cut trajectory. At 1530 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 98.82, up from 98.73 Tuesday and almost unchanged from 98.79 Monday. 

 

Meanwhile, RBI Deputy Governor Poonam Gupta, in a fireside chat at the Business Standard BFSI Summit Wednesday, said the exchange rate cannot be used as a tool to boost export competitiveness. 

 

	AT 1530 IST	AT 0900 IST	HIGH	LOW	PREVIOUS (AT 1530 IST)
Spot rupee per $1	88.1950	88.2100	88.1475	88.3450	88.2650
1-year dlr/rupee fwd (paise)	199.75	200.80	200.80	198.20	199.00

 

FORWARDS

The one-year dollar-rupee forward premium ended largely steady Wednesday as the impact of a fall in US Treasury yields was offset by the Reserve Bank of India's likely dollar sales for long-tenure forward delivery, dealers said. The RBI likely sold forward dollars for maturity in April 2027 to neutralise its spot interventions and avoid draining rupee liquidity, they said.

 

Since spot dollar sales suck out rupee liquidity from the banking system, the RBI carries out buy-sell swaps to refill liquidity. A buy-sell swap entails buying dollars for immediate delivery and entering into a contract to sell these at a future date, thereby postponing the drain on systemic liquidity. The central bank's net injection into the banking system--a proxy for the systemic liquidity deficit--was INR 80.84 billion Tuesday. 

 

US Treasury yields fell ahead of the outcome of the US FOMC meeting later in the day, when it is expected to ease rates by 25 basis points. The 10-year US bond yield fell to 3.99% Tuesday from 4.01% Monday. Forwards of a currency pair are reflective of the interest rate differential between the two countries. Fed funds futures traders are now pricing in a 99.9% chance of the Fed cutting interest rates by 25 bps Wednesday, CME FedWatch Tool showed. 

 

Meanwhile, Gupta said there is still room to ease monetary policy as growth is below potential and aspirations even at 6.8% in FY26, but when and how much remains to be seen. At 1530 IST, the one-year exact period dollar/rupee forward premium was 2.25%, unchanged against the previous close. On an absolute basis, the premium was 199.75 paise, against 199.00 paise Tuesday.

 

OUTLOOK

On Thursday, the rupee will take cues from movement in the dollar index after the US FOMC's decision, dealers said. If Powell's commentary post the FOMC decision signals towards more rate cuts by the Fed in the future, the rupee may rise towards 88.00 a dollar, some dealers said. 

 

Traders will also keenly await any development on the India-US trade deal front, especially after Trump's comments. "For the present, the range for rupee is 88 to 88.50 but the day the trade deal is announced we may see a 50-60 paisa move on the upside for rupee," said Anil Kumar Bhansali, head of treasury and executive director at Finrex Treasury Advisors LLP.

 

Dealers also expect importers to continue buying dollars, wary of further depreciation of the rupee, which would exert pressure on the local unit. Further, the Indian unit may also come under downward pressure owing to expiry of the RBI's non-deliverable forwards contracts, they said. 

 

The rupee is expected to move in a range of 88.00 to 88.50 against the dollar Thursday. Immediate technical resistance for the rupee is pegged at 88.00 per dollar, they said.

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India Rupee - World FX: Australian dlr up post CPI data; FOMC decision eyed

 

	AT 1450 IST	HIGH	LOW	PREVIOUS
GBP/USD	1.3204	1.3280	1.3198	1.3277
EUR/USD	1.1624	1.1661	1.1619	1.1653
NZD/USD	0.5776	0.5796	0.5772	0.5773
AUD/USD	0.6595	0.6618	0.6579	0.6582
USD/JPY	152.3940	152.5420	151.5450	152.0300
USD/CAD	1.3947	1.3949	1.3925	1.3943
EUR/JPY	177.1200	177.4119	176.6420	177.2200
CHF/USD	1.2542	1.2618	1.2540	1.2592
EUR/CHF	0.9267	0.9269	0.9238	0.9245

 

NEW DELHI – The Australian dollar rose 0.3% against the dollar after data released Wednesday showed inflation rose more than expected in the September quarter. Consumer prices rose by the most in two and a half years in the September quarter, dashing all hopes of a rate cut by the Reserve Bank of Australia next week and even after that. 

 

CPI inflation rose 1.3% on quarter in the September quarter, more than expectations of 1.1%, and up from 0.7% in the previous quarter. The inflation rate jumped to 3.2% on year, sharply up from 2.1% and above the top end of the Reserve Bank of Australia's 2-3% target band.

 

The dollar index rose on optimism that the US and China are on track to sign a trade deal. US President Donald Trump said in a speech in South Korea Wednesday, where he is scheduled to meet Chinese counterpart Xi Jinping on Thursday, that he thought they would get a "great deal" done for both sides. 

 

Market participants now await the outcome of the US Federal Open Market Committee's meeting later in the day, where it is expected to ease rates by 25 basis points. At 1450 IST, the dollar index, which measures the strength in the dollar against a basket of six major currencies, was at 98.97, up from 98.73 Tuesday and from 98.80 Monday.

 

Tracking the rise in dollar index, the pound sterling and yen were down 0.5% and 0.2% against the dollar, respectively. US Treasury Secretary Scott Bessent urged Japan's government on Wednesday to give the central bank scope to raise interest rates. "The government's willingness to allow the Bank of Japan policy space will be key to anchoring inflation expectations and avoiding excess exchange rate volatility," he said.

 

The Bank of Japan is widely expected to hold rates steady on Thursday. Investors will focus on any clues on the potential for a hike at the central bank's next meeting in December.

 

The euro was down 0.2% against the dollar. Preliminary data released Wednesday showed Spain's economy expanded at a slightly moderate pace of 0.6% in the September quarter from the previous quarter, when it grew 0.8%. (Pratiksha)

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India Rupee: Premium steady as RBI's fwd dlr sales offset fall in US yields

 

	AT 1355 IST	AT 0900 IST	HIGH	LOW	PREVIOUS (AT 1530 IST)
Spot rupee per $1	88.2150	88.2100	88.1475	88.3450	88.2650
1-year dlr/rupee fwd (paise)	198.38	200.80	200.80	198.20	199.00

 

NEW DELHI – The one-year dollar-rupee forward premium was largely steady Wednesday as the impact of a fall in US Treasury yields was offset by the Reserve Bank of India's likely dollar sales for long-tenure forward delivery, dealers said. The RBI likely sold forward dollars for maturity in April 2027 to neutralise its spot interventions and avoid draining rupee liquidity, they said.

 

On Wednesday, the central bank likely sold dollars in the spot market to prevent the rupee from a sharp depreciation, dealers said. Since spot dollar sales suck out rupee liquidity from the banking system, the RBI carries out buy-sell swaps to refill liquidity. A buy-sell swap entails buying dollars for immediate delivery and entering into a contract to sell these at a future date, thereby postponing the drain on systemic liquidity. 

 

Meanwhile, US Treasury yields fell ahead of the outcome of the US Federal Open Market Committee's meeting later in the day, when it is expected to ease rates by 25 basis points. The 10-year US bond yield fell to 3.99% Tuesday from 4.01% Monday. Forwards of a currency pair are reflective of the interest rate differential between the two countries.

 

Fed funds futures traders are now pricing in a 99.9% chance of the Fed cutting interest rates by 25 bps Wednesday, CME FedWatch Tool showed. Market participants will be watchful of Fed Chair Jerome Powell's speech following the interest rate decision announcement for clues about whether the central bank will cut rates again at its next meeting in December.

 

"If more rate cut expectations (by the Fed) build, forwards may get an upward push because there is still some uncertainty on December (rate cut)," a dealer at a state-owned bank said. 

 

At 1355 IST, the one-year exact period dollar/rupee forward premium was 2.25%, unchanged against the previous close. On an absolute basis, the premium was 198.38 paise, against 199.00 paise Tuesday. (Pratiksha)

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India Rupee: Tad up on India-US trade deal optimism, RBI's likely dlr sales

 

	AT 1330 IST	AT 0900 IST	HIGH	LOW	PREVIOUS(AT 1530 IST)
Spot rupee per $1	88.2100	88.2100	88.1475	88.3450	88.2650

 

NEW DELHI – The rupee recovered its earlier losses and rose slightly against the dollar as US President Donald Trump's comments fuelled hopes of a trade deal between India and the US coming through soon, dealers said. Trump Wednesday said he is ready for a trade deal with India.

 

"...I'm doing a trade deal with India and have great respect and love for Prime Minister Narendra Modi...we have a great relationship," he said at the APEC CEOs luncheon in South Korea. In August, the US imposed an import tariff of 50% on Indian goods, half of which is a penalty for purchasing crude oil from Russia.

 

"Trump's comments on trade deal led to the sharp move in rupee. Some longs (dollar positions) were unwound quickly," a dealer at a private-sector bank said. The rupee touched a high of 88.1475 a dollar following the remarks.

 

Further, some state-owned banks sold dollars, likely on behalf of the Reserve Bank of India, which supported the Indian currency, dealers said. The RBI likely sold dollars around 88.34 a dollar, they said. 

 

The Indian unit had hit a low of 88.3450 earlier in the day as banks bought dollars on behalf of importers, in order to meet their month-end payment requirements, dealers said. Some importers also purchased the greenback, noting the relatively lower dollar/rupee levels, which limited the gains for the Indian unit, dealers said. However, these dollar purchases were not aggressive in nature, they said.

 

For the rest of the day, the rupee is seen moving in a range of 88.00 and 88.40 against the greenback. Dealers peg immediate technical resistance for the rupee at 88.10. (Pratiksha)

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India Rupee: Technical levels for rupee - Oct 29

 

MUMBAI – At 1215 IST, the rupee was at 88.2725 per dollar. At 0900 IST, the rupee was at 88.2100 a dollar, against the previous close of 88.2650 a dollar. 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	88.80	88.50	87.90	87.60
Private-sector bank	88.50	88.40	87.70	87.60
Brokerage firm	88.68	88.40	88.07	87.50

 

(Rati Chaphekar)

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India Rupee: Down on importers' dollar buys; speculation RBI sold dollars

 

	AT 1005 IST	AT 0900 IST	HIGH	LOW	PREVIOUS(AT 1530 IST)
Spot rupee per $1	88.3100	88.2100	88.1900	88.3400	88.2650

 

MUMBAI – The rupee fell against the dollar as banks rushed to buy dollars on behalf of importers who were wary that the Indian unit would fall further, dealers said. "The panic buying (of dollars) because of Monday's jerk is still on," a dealer at a private sector bank said. "But some selling came in from the nationalised banks that limited fall." 

 

The rupee opened slightly higher against the dollar but soon fell as importers wanted to make the most of lower dollar levels, dealers said. Some banks also bought dollars for importers and oil marketing companies that needed dollars for their month-end payments. Some dealers also speculated that dollar sales by state-owned banks were likely on behalf of the Reserve Bank of India, which limited the fall of the rupee. On Monday, the rupee had unexpectedly slumped 0.5% against the dollar due to strong dollar buying from a few foreign banks.

 

Meanwhile, market participants have priced in the 25 basis point expected rate cut by the US Federal Open Market Committee but eagerly await commentary post the US FOMC meeting for cues on the future rate-cut trajectory of the Fed. The US FOMC decision will be known later in the day. At 1005 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 98.83, up from 98.73 Tuesday and from 98.80 Monday. 

 

For the rest of the day, the rupee is seen moving in a range of 88.00 and 88.50 against the greenback. Dealers peg immediate technical support for the rupee at 88.50. (Rati Chaphekar)

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India Rupee - Asia FX: Mixed, US FOMC commentary awaited; Thai baht dn 0.2%

 

MUMBAI – Asian currencies traded mixed Wednesday as market participants wait for the outcome of the meeting of the US Federal Reserve's Federal Open Market Committee later in the day. The US FOMC is widely expected to cut the key federal funds target rate by 25 basis points.

 

Market participants have fully priced in this rate cut but await commentary after the FOMC meeting for guidance on the Fed's rate cut trajectory. At 0910 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 98.76, up from 98.73 Tuesday but down from 98.79 Monday.

 

The South Korean won fell 0.1% against the greenback after the country's Trade Minister Yeo Han-koo early Wednesday said it was still uncertain if South Korea and the US could finalise a trade deal when US President Donald Trump visits on Wednesday. South Korean officials said the government's plan was to give the bulk of the $350 billion planned investment to be made in the US by South Korean companies as loans and loan guarantees to these companies.  

 

The Thai baht fell 0.2% against the dollar after the US treasury secretary Tuesday said Thailand and Malaysia had agreed to regularly disclose any interventions in the foreign exchange market undertaken by their central banks. Both Thailand and Malaysia committed to report interventions on at least a semi-annual basis, according to separate statements issued by the Treasury with each country's central bank. The Malaysian ringgit rose 0.1% against the greenback. 

 

The Chinese yuan traded steady against the greenback ahead of US President Donald Trump's meeting with China's President Xi Jinping Thursday and sentiment was buoyed by hope of a trade deal between the world's two largest economies. The Taiwan dollar rose 0.1% against the greenback. The Philippine peso and Indonesian rupiah fell 0.1% against the dollar.  (Rati Chaphekar)

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India Rupee: Expected range for rupee - Oct 29

 

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: 

 

PARTICIPANT	SUPPORT	RESISTANCE
State-owned bank	88.35	88.00
Private-sector bank	88.40	88.00
Brokerage firm	88.35	88.15
Brokerage firm	88.50	88.10

 

 

 

 

 

 

 

(Rati Chaphekar)

 

End

 

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

 

Edited by Vandana Hingorani

 

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