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Informist, Wednesday, Jun. 3, 2026

 

By Divya Moolayattil

 

MUMBAI – The rupee ended near a two-week low against the dollar as Brent crude oil prices rose amid escalating tensions between the US and Iran, dealers said. Persistent dollar buys by banks on behalf of oil marketing companies and other importers also weighed on the rupee, they said. 

 

However, the Indian unit erased some losses in the last leg of trade after a Bloomberg report said India is set to unveil measures to cut taxes significantly on domestic bonds held by foreign investors and that the government will remove caps on the ownership of some bonds as soon as this week.

 

"There was definitely a knee-jerk reaction in the market. If this is implemented, there could be inflows of around $20 billion, but that won't be sustainable until India's fundamentals change," a dealer at a foreign bank said.

 

The rupee also received support from the Reserve Bank of India during the day, as it sold dollars through state-owned banks to curb losses in the Indian unit, dealers said. The central bank likely sold around $500 million to $800 million on Wednesday, they said. "The RBI was selling (dollars) at 95.78 (a dollar), but not very aggressively, which kept the rupee rangebound for most of the day," the dealer said.

 

The rupee settled at 95.7050 a dollar on Wednesday, 0.5% lower than its previous close. The Indian currency moved within a 41-paise range during the day. The rupee has fallen 0.7% against the dollar so far this week. 

 

The Indian unit started the day on a weak note and plunged to a low of 95.85 during the day as Brent crude oil prices rose due to the escalation of the war in West Asia. The US on Tuesday attacked an oil vessel en route to Iran as part of Washington's blockade of Tehran's ports and coastal routes. Iran retaliated by targeting a US-Israeli vessel with naval missiles and by launching attacks on Kuwait and Bahrain.

 

The escalation sent crude oil prices to a one-week high of near $99 per barrel. At 1530 IST, the Brent crude oil for August delivery was at $98.49 per barrel, up from $96.00 Monday.

 

Banks bought dollars actively on behalf of oil companies and other importers, who feared a further fall in the rupee, dealers said. "A lot of buying (dollars) activity was seen in the market today, during early trade and in the second half. The rupee kept moving sideways until news on tax cuts on bonds came in," a dealer at a private sector bank said. 

 

Asian currencies also fell against the dollar Wednesday, with the South Korean won and Malaysian ringgit the worst performers, down 0.9% and 0.7% against the dollar, respectively. 

 

Sustained sales by foreign portfolio investors from Indian equities also weighed on the Indian unit, dealers said. FPIs have pulled out $995.51 million from Indian markets so far in June, after net selling securities worth $4.48 billion last month. Wednesday, the Sensex and Nifty 50 ended 0.4% and 0.3% down, respectively. 

 

	AT 1530 IST	AT 0900 IST	HIGH	LOW	PREVIOUS (AT 1530 IST)
Spot rupee per $1	95.7050	95.4475	95.4475	95.8500	95.2650
1-year dlr/rupee fwd (paise)	283.25	292.46	294.29	280.75	288.50

 

FORWARDS

Dollar-rupee forward premiums fell across most tenures Wednesday as the RBI likely sold dollars for forward delivery to neutralise its spot interventions and avert pushing out rupee liquidity, dealers said. The RBI was likely selling forward dollars with maturities of 12-15 months, they said. The one-year premium fell to a six-week low of 2.92% Wednesday. 

 

A rise in US Treasury yields also put pressure on forwards, dealers said. The US Treasury yield was 4.48% at 1530 IST, up from 4.46% Tuesday. 

 

However, the fall in forward premiums was limited as banks bought dollars for forward delivery on behalf of importers, dealers said. "The rise in crude oil prices triggered importers to buy in the market," the dealer said. 

 

The one-year exact period dollar-rupee forward premium was 2.94% at 1530 IST, down from Tuesday's close of 3.03%. On an absolute basis, the premium was 283.25 paise, against 288.50 paise Tuesday. 

 

OUTLOOK

Thursday, the rupee will take cues from crude oil price movement and track developments related to the war in West Asia and peace talks between the US and Iran. Market participants await the RBI's Monetary Policy Committee's decision due Friday.

 

"The next major reaction in the currency market is likely to come from the RBI policy decision, where participants will closely watch the central bank's stance on inflation, liquidity, and currency stability," Jateen Trivedi, vice president, research analyst - commodity and currency of LKP Securities, said. 

 

Expectations of measures by the RBI or the government to attract inflows have increased. "If the RBI announces relief measures, the rupee will surge around 100 paise," a dealer at a private sector bank said. "However, the rupee will bounce back due to demand from importers and constant outflows from equities."

 

Most dealers expect the RBI to intervene by selling dollars if the Indian unit comes under pressure. But they don't expect the central bank to intervene aggressively. "The RBI is trying hard to keep the rupee in a good position, but the rupee will eventually fall till the war is resolved," the dealer said. 

 

Dealers now see strong technical support for the Indian currency at 95.80 per dollar. The rupee is likely to move in a range of 95.50–96.00 against the dollar Thursday. 

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India Rupee - World FX: Dlr up on weak mkt sentiment as W Asia war escalates

 

	AT 1407 IST	HIGH	LOW	PREVIOUS
GBP/USD	1.3444	1.3472	1.3437	1.3465
EUR/USD	1.1609	1.1635	1.1605	1.1628
NZD/USD	0.5894	0.5935	0.5894	0.5924
AUD/USD	0.7160	0.7182	0.7153	0.7179
USD/JPY	159.7530	159.9960	159.3730	159.9150
USD/CAD	1.3857	1.3859	1.3837	1.3829
EUR/JPY	185.4550	186.0154	185.1210	185.9600
CHF/USD	1.2665	1.2707	1.2665	1.2699
EUR/CHF	0.9165	0.9171	0.9152	0.9154

 

MUMBAI – The dollar index rose as investors' risk appetite dampened and they flocked to safe-haven assets due to escalation in the West Asia conflict. The US Tuesday attacked an oil vessel en route to Iran as a part of Washington's blockade on Tehran's ports and coastal routes. Iran retaliated by targeting a US-Israeli vessel with naval missiles and by launching attacks on Kuwait and Bahrain. The dollar index rose to 99.34 at 1407 IST from 99.22 Tuesday. 

 

The rising tension in West Asia sent crude oil prices to a one-week-high. At 1407 IST, Brent crude oil prices for August delivery rose to $98.68 a barrel from $96.00 Tuesday and $94.98 Monday. 

 

The euro fell 0.2% against the dollar as private sector activity in Eurozone shrank at the fastest rate in 18 months in ‌May. The S&P Global composite Purchasing Managers' Index output index for Eurozone fell to 48.5 in May from 48.8 in April, its lowest reading since November 2024.

 

The pound sterling fell 0.1% as the UK's business activity declined for the first time since April 2025 to 49.3 in May from 52.7 the previous month. The Japanese yen fell for the third consecutive day to 0.1% against the dollar Wednesday. 

 

The Swedish krona and the Swiss franc fell 0.35% against the US unit. (Divya Moolayattil)   

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India Rupee: 1-yr fwd premium at 6-wk low as RBI likely holds buy-sell swaps

 

--1-year dollar-rupee forward premium at 2.96% Wed vs 3.03% Tue 

--Dealers:RBI sells fwd dlrs to offset rupee liquidity drain from spot sales 

--Dealers: RBI likely conducting dlr-rupee buy-sell swaps maturing 12-15 mos 

--1-year dollar-rupee forward premium at 2.96% Wed vs 3.03% Tue 

 

	AT 1342 IST	AT 0900 IST	HIGH	LOW	PREVIOUS (AT 1530 IST)
Spot rupee per $1	95.7800	95.4475	95.4475	95.7950	95.2650
1-year dlr/rupee fwd (paise)	285.43	292.46	294.29	285.43	288.50

 

MUMBAI – Dollar-rupee forward premiums fell across most tenures Wednesday, with the one-year premium hitting a six-week low, as the Reserve Bank of India likely sold dollars for forward delivery to neutralise its spot interventions and avert pushing out rupee liquidity, dealers said. The RBI was likely selling forward dollars for maturity in 12-15 months, they said.

 

"The RBI sold very less in the spot today, just to keep the rupee range-bound and manage extreme volatility. They are doing buy-sell swaps in forwards too," a dealer at a private sector bank said. This week, the RBI has been actively selling forward dollars for long-term delivery, dealers said. 

 

On Wednesday, the rupee slumped 0.5% against the dollar, nearing the 96-per-dollar mark, as importers rushed to buy dollars, fearing further depreciation of the rupee amid higher oil prices. Brent crude oil prices rose sharply to $97.97 a barrel, up almost $4 per barrel from the end of the Indian trading session Tuesday. However, the fall of the rupee was limited as state-owned banks sold dollars, likely on behalf of the RBI, dealers said.   

 

Further, US Treasury yields rose amid escalation in the West Asia conflict, which also put pressure on forwards, dealers said. The US Treasury yield was 4.48% at 1300 IST, up from 4.46% Tuesday. 

 

However, banks bought dollars for forward delivery on behalf of importers, which limited losses for the premiums, dealers said. "Importers are hedging actively as it is a favourable rate and also due to escalation in the West Asia war," a dealer at a brokerage firm said.   

 

At 1344 IST, the one-year exact period dollar-rupee forward premium was 2.96%, against Tuesday's close of 3.03%. On an absolute basis, the premium was 285.43 paise, against Tuesday's close of 288.50 paise. (Divya Moolayattil)  

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India Rupee: Plunges as oil up on W. Asia war escalation; RBI dlr sales help

 

	AT 1125 IST	AT 0900 IST	HIGH	LOW	PREVIOUS(AT 1530 IST)
Spot rupee per $1	95.7800	95.4475	95.4475	95.7825	95.2650

 

MUMBAI – The rupee fell sharply Wednesday as banks bought dollars actively for oil marketing companies and other importers who were weary of further depreciation of the rupee, dealers said. "There was huge buying activity in the morning, especially from oilers (oil marketing companies) due to a rise in oil prices, which moved rupee by over 50 paise," a dealer at public sector bank said. 

 

At 1125 IST, Brent crude oil prices for August delivery rose nearly 5% to $97.43 a barrel from Tuesday's low of $92.8 a barrel. Brent crude rose sharply and closed at $96.00 a barrel Tuesday after the US and Iran continued attacks. US forces Tuesday struck an Iranian oil tanker near the Strait of Hormuz. Iran retaliated by targeting a US-Israeli vessel with naval missiles before US forces struck a communications tower in Iran's Qeshm Island. These strikes come even as both sides say that the ceasefire is holding and negotiations for a potential framework to end the war are ongoing.  

 

Dealers said the fall in the rupee was limited as the Reserve Bank of India stepped in mildly and sold dollars through state-owned banks. "The RBI stepped in once importers' active buying was complete. The RBI was selling at 95.78 (a dollar) level, but very less, keeping the rupee range bound," a dealer at a private sector bank said. 

 

While the rupee may stay below 96.00 per dollar Wednesday, further escalation in the war could push it past that level within two days, dealers said. Domestic equity indices, the Nifty 50 and the Sensex were down sharply by 1.1% and 1.2%, respectively, at 1125 IST, which exerted more pressure on the rupee. 

 

For the rest of the day, the rupee is seen moving in the range of 95.45-95.95 per dollar. Dealers see immediate technical support for the rupee at 95.85 a dollar. (Divya Moolayattil)

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India Rupee: Technical levels for rupee - Jun 3

 

MUMBAI – At 1121 IST, the rupee was at 95.7525 a dollar. At 0900 IST, the rupee was at 95.4475 a dollar, against the previous close of 95.2650. Following are the key support and resistance levels for the rupee as provided by leading banks and a brokerage:

 

Participant	S2	S1	R1	R2
Public-sector bank	96.00	95.80	95.40	95.20
Private-sector bank	96.00	95.85	95.45	95.15
Private-sector bank	95.95	95.80	95.30	95.10
Foreign bank	96.10	95.90	95.20	94.90
Brokerage firm	96.10	95.85	95.35	95.15
Brokerage firm	96.00	95.80	95.20	95.00

 

(Divya Moolayattil)

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India Rupee: Falls as oil rises sharply amid West Asia war; RBI may step in

 

	AT 0930 IST	AT 0900 IST	HIGH	LOW	PREVIOUS(AT 1530 IST)
Spot rupee per $1	95.4900	95.4475	95.4475	95.5150	95.2650

 

MUMBAI – The rupee fell sharply against the dollar Wednesday as oil prices touched $97 a barrel in early trade. Crude oil prices jumped late Tuesday after the US attacked an oil vessel en route to Iran as part of Washington's naval blockade. Iran also launched drones and missiles targeting US bases in Kuwait and Bahrain. At 0900 IST, Brent crude oil for August delivery rose to $96.80 a barrel from $96.00 Tuesday. Brent crude oil was trading at $92.83 for most of Tuesday. 

 

Dealers expect the rupee to remain weak unless tension in West Asia wanes and there's some positive development around the US-Iran peace negotiations. "News on the war front is not good. There is going to gap-up opening of 10-15 paise every day till war continues. Crude oil prices will continue to influence the rupee movement," a dealer at a public sector bank said.

 

Asian currencies were also 0.1-0.4% down in early trade Wednesday due to negative sentiment in the market amid higher crude oil prices. Given the sustained pressure on the Indian currency, dealers expect public sector banks to sell dollars on behalf of the Reserve Bank of India to support the rupee. "It is difficult to say at what level RBI can step in. They are not looking to protect any levels now, just curbing volatility," the dealer said. 

 

During the day, dealers expect buying of dollars by banks on behalf of importers, especially oil importers, fearing further depreciation of the rupee going ahead. For the rest of the day, the rupee is seen moving in the range of 95.20-95.65. Dealers see immediate technical support for the rupee at 95.65 a dollar, a break of which may drag the rupee towards 95.80. (Divya Moolayattil)

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India Rupee: Expected range for rupee - Jun 3

 

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

 

PARTICIPANT	SUPPORT	RESISTANCE
Private-sector bank	95.70	95.20
Private-sector bank	95.55	95.15
Foreign bank	95.65	95.25
Foreign bank	95.70	95.20
Foreign bank	95.80	95.20
Brokerage firm	95.65	95.10
Brokerage firm	95.57	95.17

 

 

 

 

 

 

 

 

 

 

(Divya Moolayattil)

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India Rupee - Asia FX: Fall amid rising tension in W Asia, high crude prices

 

MUMBAI – Most Asian currencies fell against the dollar in early trade Wednesday as crude oil prices rose sharply after the US struck an oil tanker that was sailing towards Iran, as part of Washington's naval blockade. Iran launched drones and missiles targeting US bases in Kuwait and Bahrain.

 

Brent crude oil price for August delivery rose over 4% to $97.00 a barrel from Tuesday's low of $92.8 a barrel. Brent crude oil had touched a high of $96.28 Tuesday as both countries traded strikes. A US official on Wednesday said the US will not remove sanctions on Iran in exchange for a full reopening of the Strait of Hormuz, and that any sanctions relief is conditioned on Iran giving up enriched uranium.

 

The Indonesian rupiah fell 0.2% against the dollar as investors remained on edge amid escalating tensions in West Asia and with no signs of progress in peace talks between the warring sides. The Malaysian ringgit was the worst hit, down 0.3% against the dollar. The South Korean won fell 0.2% against the greenback. 

 

The Philippine peso was marginally lower as crude prices rose amid growing tensions between the US and Iran. The Chinese yuan and the Thai Baht fell nearly 0.1% against the dollar. (Divya Moolayattil)

 

End

 

US$1 = INR 95.7050

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

 

Edited by Saji George Titus

 

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