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Informist, Thursday, Nov. 20, 2025

By Rati Chaphekar

MUMBAI – The rupee ended lower against the dollar Thursday due to a surge in the dollar index owing to dampened hopes of a rate cut by the Federal Reserve next month and persistent greenback purchases by importers, dealers said. "All the gains rupee made in the last fews days were gone due to the buying pressure (of dollars) today," a dealer at a state-owned bank said. "But 88.80 (a dollar) still held on."

The rupee touched a low of 88.7400 a dollar during the day, within a spitting distance from its lifetime low of 88.8025 a dollar hit on Sept. 30. However, some dealers speculated that the Reserve Bank of India likely sold dollars, which kept the Indian unit from hitting a record low. 

After trading in a range of 12 paise during the day, the Indian unit ended the day at 88.7050 a dollar, down from 88.5875 a dollar Wednesday.

The rupee started the day lower against the dollar as the dollar index surged to a two-week-high early Thursday after minutes of the US Federal Reserve's October meeting showed many officials were not in favour of a rate cut in December as they were questioning lowering borrowing costs further, which dampened hopes that the US Federal Open Market Committee would cut rates next month. 

The split among Fed officials over whether potential weakness in the job market should take priority over inflation, which has been above the central bank's target for four-and-a-half years, has not moved much lately, and is expected to improve only slowly next year. At 1530 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 100.17, up from 100.12 Wednesday and sharply higher than 99.60 Tuesday. The index rose to 100.32 earlier in the day. Fed fund futures traders are now pricing in a 32.8% chance of a 25-basis-point cut at the December meeting, down from 62.4% a week ago, according to CME's FedWatch Tool.

The domestic unit fell further against the dollar as banks persistently bought dollars on behalf of importers, who were wary of further depreciation in the Indian unit, dealers said. Some dealers said the ongoing uncertainty over the India-US trade deal has led to an increase in importers' demand for dollar. "The underlying demand (for dollars) is not going anywhere till the time the trade deal doesn't happen," a dealer at private-sector bank said. 

A fall in its other Asian peers also weighed on the Indian unit, they said. Other Asian currencies fell 0.1-0.2% against the greenback, with the Philippine peso being the worst hit.

Meanwhile, some dealers speculated that state-owned banks sold dollars, likely on behalf of the RBI, which prevented the domestic unit from hitting a record low. The central bank has been intervening actively in the foreign exchange market since late September and has prevented the rupee from falling past the 88.80 per dollar mark. 

Further, some dealers said foreign banks sold dollars, likely for foreign portfolio investors looking to invest in the domestic stock market, which also limited the losses in the Indian currency. On Thursday, both the Sensex and Nifty 50 ended 0.5% higher each.

FORWARDS

The one-year dollar-rupee forward premium ended off lows Thursday as banks bought dollars for forward delivery on behalf of importers, noting the relatively lower levels, dealers said. The forward premium had fallen to 2.14% earlier in the day.

Importers also bought forward dollars fearing a further depreciation in the rupee, dealers said. The rupee broke its three-day rise and fell against the dollar Thursday due to the sharp rise in the dollar index. 

The forward premium fell earlier due to a rise in US Treasury yields, dealers said. The 10-year US bond yield rose to 4.13% Wednesday from 4.12% Tuesday on dampened rate cut hopes by the Fed next month.

At 1530 IST, the one-year exact-period dollar/rupee forward premium was 2.17%, tad down from the previous close of 2.18%. On an absolute basis, the premium was 192.67 paise, against Wednesday's close of 194.10 paise.

OUTLOOK

On Friday, the rupee is likely to take cues from the movement in the dollar index and other Asian currencies, dealers said. However, most expect the RBI to continue intervening actively in the currency market to hold the rupee above 88.80 a dollar.

Market participants will also continue to watch for developments related to the India-US trade talks. RBI Governor Sanjay Malhotra said Thursday, post market hours, that a trade deal between India and the US should help reduce pressure on the rupee. He said he is confident of a good trade deal with the US going forward. 

Dealers expect importers to continue buying dollars at every dip in the dollar-rupee rate, which would keep intact the downward pressure on the local currency. "While domestic flows offered some support, the broader momentum remains tilted toward weakness given the firm dollar and ongoing global uncertainty," Jateen Trivedi, vice president of research - commodity and currency, LKP Securities, said in a note. "Rupee is expected to move within a range of 88.40–89.00."

Market participants will keenly watch out for the slew of economic data from the US, especially the September non-farm payrolls report, due later in the day. The data is among the key indicators the Federal Reserve looks at for its interest rate decisions.    

The rupee is expected to move in a range of 88.40 to 88.80 against the dollar. Immediate technical support for the rupee is pegged at 88.80 per dollar and resistance at 88.30.

India Rupee - World FX: Yen down on Japan finance minister's comments

MUMBAI – The yen fell 0.2% against the dollar after Japan's Finance Minister Satsuki Katayama Wednesday said Bank of Japan Governor Kazuo Ueda and key economic ministers of the country's new government have agreed to watch market developments with a "strong sense of urgency." Katayama also said she had "no particular objection" to Ueda's explanation that the Bank of Japan was gradually adjusting the degree of monetary support through interest rate hikes.

The dollar index surged to a two-week high after minutes of the US Federal Reserve's meeting held in October showed many officials were not in favour of a rate cut in December, which dampened hope that the US Federal Open Market Committee would cut rates next month. At 1400 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 100.28, up from 100.12 Wednesday and sharply higher than 99.60 Tuesday.

Traders are also waiting for key economic data from the US, especially the September non-farm payrolls report due later in the day. The data is among the key indicators the Federal Reserve looks at for its interest rate decisions. Private data released last week showed signs of a weakening labour market. If official US data comes in line with private data, it may renew hopes of a rate cut by the Fed at its December meeting.

The US government's economic data was not published for almost six weeks due to the longest-ever US government shutdown that ended last week. However, the White House has said that only the data for September will be released and the October US jobs and inflation reports might never be released. October non-farm payrolls data will not be released and the November jobs report will be delayed to Dec. 16, a US government agency said Wednesday.

The Australian dollar fell 0.1% against the US dollar after a senior Reserve Bank of Australia official Thursday said it is examining three issues that could influence policy, including whether companies have changed how they set prices and whether the transmission channels for monetary policy have changed. "We are constantly curious about how the economy is shifting and changing beneath the surface, the drivers of these undercurrents, and what they collectively mean for policy settings," the official said. On the other hand, the New Zealand dollar rose 0.2% against the greenback.

The euro and Swiss franc fell 0.1% against the greenback while the pound sterling rose 0.1%.  (Rati Chaphekar)

India Rupee: Premium off low as importers buy fwd dlrs; rise in US yld weigh

MUMBAI – The one-year dollar-rupee forward premium came off its earlier low Thursday as banks bought dollars for forward delivery on behalf of importers, noting the relatively lower levels, dealers said. The forward premium had fallen to 2.14% earlier in the day.

Importers also bought forward dollars fearing a further depreciation in the rupee, dealers said. The rupee broke its three-day rise and fell against the dollar Thursday as the dollar index surged to a two-week-high as hopes that the US Federal Reserve may cut interest rate in December dampened. The Indian unit touched a low of 88.7400 a dollar Thursday, not too far from its lifetime low of 88.8025 a dollar hit on Sept. 30.

Forward premium fell due to a rise in US Treasury yields as hopes of a rate cut by the US Fed next month faded after minutes of its October meeting showed that many of the committee members were not keen on cutting rates in December. The 10-year US bond yield rose to 4.13% Wednesday from 4.12% Tuesday.

Market participants are now waiting for a slew of key US economic data which was not published for over a month due to the prolonged US government shutdown. Traders will take into account the September non-farm payrolls report due later in the day, which is among the key metrics that the Fed tracks for its interest rate decision.

At 1330 IST, the one-year exact period dollar/rupee forward premium was 2.17%, slightly down from the previous close of 2.18%. On an absolute basis, the premium was 192.67 paise, against Wednesday's close of 194.10 paise. (Rati Chaphekar)

India Rupee: Remains down as importers buy dlrs; RBI's dlr sales speculated

MUMBAI – The rupee remained down against the dollar as banks persistently bought dollars on behalf of importers, who were wary of further depreciation in the Indian unit, dealers said. "The buying (of dollars) pressure peaked in the morning, but has stabilised after that," a dealer at a private sector bank said. "Looks like nats (nationalised banks) are putting strong defence at 88.70 a dollar level."

Some dealers speculated that state-owned banks sold dollars, likely on behalf of the Reserve Bank of India, which prevented the domestic unit from hitting a record low. The central bank has been intervening actively in the foreign exchange market since late September and has prevented the rupee from falling past the 88.80 per dollar mark. The Indian currency had hit a lifetime low of 88.8025 on Sept. 30.

The rupee also stayed under constant pressure as the dollar index surged after minutes of the US Federal Reserve's October meeting showed that several committee members were not keen on cutting rates in December, which further dented hopes of a rate cut by the Fed in December. At 1305 IST, the dollar index, which measures the strength in the dollar against a basket of six major currencies, was at 100.27, up from 100.12 Wednesday and sharply higher than 99.60 Tuesday. Fed fund futures traders are now pricing in a 32.8% chances of a 25-bps rate cut at the December meeting, down from 62.4% a week ago, according to CME's FedWatch Tool.

For the rest of the day, the rupee is seen moving between 88.40 and 88.80 against the greenback. Dealers peg the immediate technical support for the rupee at 88.80. (Rati Chaphekar)

India Rupee: Falls as dollar index at 2-wk high; RBI likely to sell dollars

MUMBAI – The rupee fell against the dollar Thursday as the dollar index surged to a two-week-high after minutes of the US Federal Reserve's October meeting showed that many of the committee members were not keen on cutting rates in December, which further dented hopes of a rate cut by the Fed in December. "The surge in dollar index is putting rupee under pressure," a dealer at a state-owned bank said. "I think we may see intervention (by Reserve Bank of India through dollar sales) any moment now."

The dollar index rose as some US Fed officials questioned the lowering of borrowing costs further, even as "several members" were in favour of cutting rates. The Federal Open Market Committee has cut rates by 25 basis points each in September and October. At 0925 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 100.32, up from 100.12 Wednesday and sharply higher than 99.60 Tuesday. Fed fund futures traders are now pricing in a 32.8% chance of a 25-bps cut at the December meeting, down from 62.4% a week ago, according to CME's FedWatch Tool.

The central bank has been intervening actively in the foreign exchange market since late September and has prevented the rupee from falling past the 88.80 per dollar mark. The Indian currency had hit a lifetime low of 88.8025 on Sept. 30. "We might test the lifetime low today (Thursday)," a dealer at a private sector bank said. "Buying pressure (of dollars) from importers is also high and we are seeing no signs of selling by nationalised banks (likely for RBI)." 

Banks persistently bought dollars for importers who were wary of a further fall in the rupee, which added to the pressure on the domestic unit, dealers said. For the rest of the day, the rupee is seen moving between 88.40 and 88.80 against the greenback. Dealers peg the immediate technical support for the rupee at 88.80. (Rati Chaphekar)

India Rupee - Asia FX: Down as dollar index surges to 2-wk high; won steady

MUMBAI – Most Asian currencies fell against the dollar Thursday as the dollar index surged to a two-week high after minutes of the US Federal Reserve's October meeting showed many officials were not in favour of a rate cut in December, which dampened hope that the US Federal Open Market Committee would cut rates next month. At 0925 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 100.31, up from 100.12 Wednesday and sharply higher than 99.60 Tuesday. 

Traders also await key economic data from the US, especially the September non-farm payrolls report, due Thursday. The data is among the key indicators the Federal Reserve looks at for its interest rate decisions. However, private data released last week showed signs of a weakening labour market. If official US data comes in line with private data, it may renew hopes of a rate cut by the Fed at its December meeting.

The US government's economic data was not published for almost six weeks due to the longest ever US government shutdown that ended last week. However, the White House has said that only the data for September will be released and the October US jobs and inflation reports might never be released. October non-farm payrolls data will not be released and the November jobs report will be delayed to Dec. 16, a US government agency said Wednesday.

Tracking the sharp rise in dollar index, the Philippine peso and Malaysian ringgit fell 0.3% against the greenback and the Indonesian rupiah fell 0.2%. 

The Chinese yuan fell 0.1% against the greenback. The People's Bank of China kept its benchmark lending rates unchanged Thursday for the sixth consecutive month in November, in line with market expectations. The country's one-year loan prime rate was held at 3.0%, while the five-year rate was kept unchanged at 3.5%. The Taiwan dollar traded steady against the US unit.

The South Korean won also traded steady against the greenback. The country' finance ministry Wednesday said that South Korea plans to unveil incentives for long-term stock investors, while making efforts to ensure foreign exchange stability. The won has weakened 0.8% this week, after last week's sharp gains following Finance Minister Koo Yun-cheol's pledge for market stabilising measures.  (Rati Chaphekar)

India Rupee: Expected range for rupee - Nov 20

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

(Rati Chaphekar)

End

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

Edited by Tanima Banerjee

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