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Informist, Tuesday, Jul. 7, 2026

 

By Divya Moolayattil

 

MUMBAI – The rupee jumped against the dollar, posting its biggest gain in over three weeks Tuesday, as banks sold dollars actively for foreign inflows following the slew of measures by the Reserve Bank of India, dealers said. The RBI also sold dollars during the day to support the rupee. However, dollar demand from importers put pressure on the Indian unit, they said. 

 

"There were huge dollar inflows in the market during the last leg of trade. RBI is also doing a very controlled selling, a V-shaped selling. There was also a pullback at every support level," a dealer at a foreign bank said.

 

The rupee settled at a one-week high at 94.9675 a dollar on Tuesday, up nearly 0.5% from the previous close. The Indian unit moved in a 42-paise range during the day. Most Asian currencies gained 0.1-0.6% against the greenback, with the South Korean won being the best performer, followed by the Indian rupee.  

 

The rupee started the day on a positive note as the dollar index retreated from a high of 101.17 to 100.80 on Monday, following US ISM services Purchasing Managers' Index data, which fell to 54.0 in June from 54.5 in May. However, the sentiment from the US data subsided quickly and focus shifted to the minutes of the Federal Reserve's meeting in June due Wednesday, which will give clear direction on rate hikes this year. At 1530 IST, the dollar index was at 100.95, inching closer to 101, from 100.86 Monday.  

 

The rupee rose above the key 95.00-per-dollar mark as banks actively sold dollars for foreign inflows. Dealers speculated that dollar inflows would be $1.5 billion to $2 billion on Tuesday. The market also remained positive in anticipation of foreign fund inflows amid a heavy pipeline of initial public offerings, with a major IPO by SBI Funds Management likely in mid-July, which may provide local currency with a buffer against volatility, dealers said.   

 

Foreign portfolio investors turned net buyers in June and so far in July, after being net sellers for three months till May. They net bought securities worth $874 million in the Indian markets so far in July and $2.69 billion in June, compared with net sales of $21.8 billion in the three months through May.

 

FPIs bought debt through the fully accessible route worth $2.15 billion in June and $195.73 million so far in July. Foreign inflows into debt may continue, as market participants are hopeful about the inclusion of Indian bonds in Bloomberg Index Services Ltd.'s flagship Global Aggregate Index, the update for which is due in mid-July, following the government's and RBI's recent foreign capital measures. Depending on the weightage of India's government bonds in the marquee index, FPIs are expected to buy more than $20 billion in Indian gilts over the next year. 

 

The Reserve Bank of India also sold dollars through state-owned banks Tuesday at multiple levels to support the Indian unit, they said. "At around 95.35 (a dollar), there was RBI's selling and then some more selling was seen at 95.27 (a dollar). The rest were organic dollar sales," a dealer at a public sector bank said.    

 

"Saudi Arabia has cut its August crude oil prices for Asian buyers amid easing geopolitical tensions in West Asia, thus improving sentiments, and pushing short covering in rupee," Jateen Trivedi, vice president, research analyst - commodity and currency, LKP Securities, said. Saudi Arabia has set the August Arab Light crude oil official selling price to Asia at $1.50 per barrel below the Oman and Dubai average, its lowest level since June 2020. The $11-per-barrel cut was steeper than the $8-per-barrel cut expected by analysts.

Brent crude oil prices for September delivery rose almost a dollar per barrel to $72.78 Tuesday, weighing on the Indian unit. The slight uptick in crude oil came after Iran's Islamic Revolutionary Guard Corps fired missiles at two commercial ships near the Strait of Hormuz early Tuesday, media reports said, marking an escalation that threatens to complicate negotiations to end the US-Iran war. At 1530 IST, Brent crude oil for September delivery rose $72.83 per barrel from $71.99 Monday.

 

	AT 1530 IST	AT 0900 IST	HIGH	LOW	PREVIOUS (AT 1530 IST)
Spot rupee per $1	94.9675	95.3250	94.9500	95.3700	95.3950
1-year dlr/rupee fwd (paise)	262.00	265.00	267.00	262.00	265.83

 

FORWARDS 

The one-year forward dollar-rupee forward premiums fell slightly as some dealers speculated that the Reserve Bank of India may have sold dollars for forward delivery to neutralise its spot interventions.  The RBI conducts buy-sell swaps to replenish liquidity as its spot dollar sales drain rupee from the banking system.

 

However, the fall in forward premiums was limited because banks actively purchased dollars for forward delivery on behalf of importers, they said. The one-year forward premium shed some gains after hitting a 12-day high of 267.00 paise or 2.80% during the day. 

 

A rise in US Treasury yields also put pressure on forward premiums, dealers said. At 1530 IST, the 10-year US treasury yield rose to 4.51% from 4.48% Monday. 

 

At 1530 IST, the one-year exact period dollar-rupee forward premium was 2.78%, slightly below Monday's close of 2.79%. On an absolute basis, the premium was 262.00 paise, against 265.83 paise Monday.

 

 

OUTLOOK 

On Wednesday, the rupee is likely to track market flows, with dealers saying the absence of fresh cues from the US-Iran peace talks and the dollar index will leave dollar demand and supply dynamics as the key drivers of trading. "The market definitely recovers after a sharp correction, so a downside of 95.25 is expected if the foreign fund inflows fail to continue," the dealer said. 

 

Market participants also await the minutes of the Federal Reserve's June meeting, due late Wednesday, for clarity on the Fed's move at its next policy meeting and on the dollar index. 

 

Dealers expect importers to continue buying dollars, which will weigh on the rupee. However, they also expect the RBI to intervene if the rupee comes under extreme pressure. Dealers expect exporters to also step in and sell dollars as underlying sentiment remains positive and the rupee crossed the key 95.00 figure on Tuesday.

 

Dealers see strong technical resistance for the Indian currency at 94.75 per dollar, a break of which may push the Indian unit below 94.60. The rupee is likely to move in a range of 94.75–95.20 against the dollar Wednesday. 

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India Rupee - World FX: Dlr index rises as mkt awaits Fed meeting minutes

 

	AT 1418 IST	HIGH	LOW	PREVIOUS
GBP/USD	1.3393	1.3402	1.3375	1.3388
EUR/USD	1.1431	1.1448	1.1425	1.1444
NZD/USD	0.5692	0.5707	0.5687	0.5696
AUD/USD	0.6943	0.6960	0.6935	0.6954
USD/JPY	161.8740	162.1830	161.6560	162.0300
USD/CAD	1.4212	1.4222	1.4201	1.4199
EUR/JPY	185.0540	185.5317	184.8000	185.4770
CHF/USD	1.2400	1.2428	1.2392	1.2414
EUR/CHF	0.9218	0.9220	0.9211	0.9212

 

MUMBAI – The dollar index started inching up after retreating on Monday as US ISM services purchasing managers index reading slowed from the previous month. However, the sentiment from the US data subsided quickly and focus shifted to the minutes of the Federal Reserve's meeting in June, which will give direction to investors' expectations of a rate hike this year. The dollar index was 100.96, inching closer to 101, from 100.86 Monday. 

 

Brent crude oil prices for September delivery rose almost a dollar per barrel to $72.78 Tuesday, which weighed on currencies. The slight uptick in crude oil came after Iran's Islamic Revolutionary Guard Corps fired missiles at two commercial ships near the Strait of Hormuz early Tuesday, according to a senior US official cited in media reports, marking an escalation that threatens to complicate negotiations to end the US-Iran war. At 1430 IST, Brent crude oil prices for Septemeber delivery were $72.83 a barrel, up from $71.99 Monday. 

 

The euro rose 0.2% to $1.144 from $1.142 Monday as Germany's industrial production increased 0.9% in May from the previous month. Germany is the largest bloc in the euro zone. 

 

The pound sterling rose to a three-week high to $1.34 from $1.33 on Monday as the US unit continued to slip in the wake of Thursday's weaker-than-expected US jobs report. The recent drop in oil prices to pre-war levels also reduced pressure on the Bank of England to raise borrowing costs. Investors also await minutes of the Financial Policy Committee's meeting in June. 

 

The Japanese yen also rose 0.3% to 161.86 a dollar from 162.32 Monday as Japan's leading economic index, which gauges the outlook for economic activity in the months ahead using indicators such as job offers and consumer sentiment, increased to 116.8 in May from 116.1 in April, but came in slightly below market estimates of 116.9. It was also the highest level since July 2021.

 

The Swiss franc and Canadian dollar were steady against the dollar Tuesday. (Divya Moolayattil)

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India Rupee: 1-year premium rises as banks buy forward dollars for importers

 

	AT 1300 IST	AT 0900 IST	HIGH	LOW	PREVIOUS (AT 1530 IST)
Spot rupee per $1	95.2500	95.3250	95.2900	95.3500	95.3950
1-year dlr/rupee fwd (paise)	266.50	265.00	267.00	264.36	265.83

 

MUMBAI – The one-year dollar-rupee forward premiums rose to a one-week high across tenures as banks purchased dollars actively for forward delivery on behalf of importers, dealers said. The one-year forward premium shed some gains after hitting a 12-day high of 267.00 paise or 2.80% during the day. 

 

However, the rise in forward premiums was limited as some dealers speculated that the Reserve Bank of India may have sold dollars for forward delivery to neutralise its spot interventions. The RBI likely sold dollars in the spot market at around 95.35 a dollar, they said. The rupee rose to a high of 95.2325 a dollar Tuesday. "The RBI was selling, but not aggressively, just to hold 94.40 level. The volume in the market is very low right now," a dealer at a foreign bank said. 

 

Considering spot dollar sales drain out rupee liquidity from the banking system, the RBI conducts buy-sell swaps to replenish 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. 

A rise in US Treasury yields puts pressure on premium forwards, dealers said. At 1300 IST, the 10-year US treasury yield rose to 4.51% from 4.48% Monday. 

 

The one-year exact period dollar-rupee forward premium was 2.798% at 1300 IST, slightly below Monday's close of 2.787%. On an absolute basis, the premium was 266.50 paise, against 265.83 paise Monday. (Divya Moolayattil)

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India Rupee: Rises on FPI inflows; importers' dollar purchases weigh

 

	AT 1200 IST	AT 0900 IST	HIGH	LOW	PREVIOUS (AT 1530 IST)
Spot rupee per $1	95.2950	95.3250	95.2900	95.3500	95.3950

 

MUMBAI – The rupee rose slightly against the dollar as banks sold greenback on behalf of foreign investors amid slew of measures by the Reserve Bank of India and government to attract foreign funds, dealers said. Foreign fund inflows into domestic bonds and equities rose in July, which supported the rupee, they said. 

 

Foreign portfolio investors turned net buyers in June and so far in July, after being net sellers for three months till May. They net bought $874.02 million in the Indian markets so far in July and $2.69 billion in June, compared with net sales of $21.8 billion in the three months through May.

 

However, banks also bought dollars on behalf of importers, who feared a rise in crude oil prices as the fragile deal between the US and Iran came under tension, dealers said. "There was significant buying as soon as the market opened and it took the rupee to 95.37. They are buying because crude could rise anytime if there's any disruption in Hormuz," a dealer at a private sector bank said. 

 

Brent crude oil prices for September delivery rose almost a dollar per barrel to $72.78 Tuesday, which weighed on the Indian unit. The slight uptick in crude oil came after Iran's Islamic Revolutionary Guard Corps fired missiles at two commercial ships near the Strait of Hormuz early Tuesday, according to a senior US official cited in media reports, marking an escalation that threatens to complicate negotiations to end the US-Iran war. 

 

The rupee was also weighed as the dollar index started inching up after retreating late on Monday amid US ISM services purchasing managers index reading slowed from the previous month, but was in line with expectations. However, the sentiment from the US data subsided quickly and focus shifted to the minutes of the Federal Reserve's meeting in June, which will give direction to investors' expectations of a rate hike this year. The dollar index was 100.96, inching closer to 101, from 100.86 Monday. 

 

For the rest of the day, the rupee is expected to move in the range of 95.20-95.50. Dealers see immediate technical resistance for the rupee at 95.20 a dollar. (Divya Moolayattil) 

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India Rupee: Technical levels for rupee - Jul 7

 

MUMBAI – At 1105 IST, the rupee was at 95.3225 a dollar. At 0900 IST, the rupee was at 95.3250 a dollar, against the previous close of 95.3950. 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	95.65	95.50	95.15	95.05
Public-sector bank	95.65	95.50	95.15	95.00
Private-sector bank	95.65	95.50	95.15	94.90
Private-sector bank	95.60	95.50	95.25	95.15
Foreign bank	95.80	95.60	95.25	95.15
Foreign bank	95.80	95.65	95.20	95.15
Brokerage firm	95.65	95.55	95.15	95.00
Brokerage firm	95.80	95.50	95.20	95.10

 

(Divya Moolayattil)

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India Rupee: Tad up as dollar index retreats; importers demand to weigh

 

	AT 0930 IST	AT 0900 IST	HIGH	LOW	PREVIOUS (AT 1530 IST)
Spot rupee per $1	95.3450	95.3250	95.2900	95.3500	95.3950

 

MUMBAI – The rupee rose slightly against the greenback in early trade Tuesday as the dollar retreated after the US ISM purchasing managers index fell from the previous month's reading. The dollar index, which rose to a high of 101.14, closed at 100.85 Monday as the PMI fell to 54.0 in June from 54.5 in May, but was in line with market expectations.

 

The dealers expect importers to step in and buy dollars aggressively as the day progresses, which will put downward pressure on the Indian unit. However, the state-owned banks are likely to sell dollars on behalf of the Reserve Bank of India at around 95.50 a dollar, they said. 

 

Market participants also remain hopeful about the inclusion of Indian bonds in Bloomberg's Global Aggregate Index, which will be positive for the Indian unit. A committee of Bloomberg Index Services is expected to meet in mid-July to review, according to media reports. "Inclusion of our bonds in the Bloomberg global index can trigger a sharp appreciation of the rupee to 94.50 (a dollar), because we will see huge dollar inflows then," a dealer at a public sector bank said. 

 

Dealers also expect foreign portfolio inflows into domestic bonds and equities to further support the rupee. Foreign portfolio investors turned net buyers in June and so far in July after being net sellers for three months till May. They have net bought $874.02 million in the Indian markets so far in July and $2.69 billion in June, compared with net sales of $21.8 billion in the three months through May. Foreign investors, who have been net sellers for a long time, invested a net $500.36 million in domestic equities so far in July. 

 

For the rest of the day, the rupee is expected to move in the range of 95.20-95.50. Dealers see immediate technical resistance for the rupee at 95.20 a dollar. (Divya Moolayattil) 

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India Rupee: Expected range for rupee - Jul 7

 

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

 

PARTICIPANT	SUPPORT	RESISTANCE
Public-sector bank	95.50	95.20
Private-sector bank	95.60	94.15
Private-sector bank	95.50	95.25
Private-sector bank	95.65	95.30
Private-sector bank	95.50	95.20
Foreign bank	95.70	94.25
Brokerage firm	95.65	94.15
Brokerage firm	95.50	95.15

 

 

 

 

 

 

 

 

 

 

 

 

(Divya Moolayattil)

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India Rupee - Asia FX: Steady as dlr pares some gains after US service PMI

 

MUMBAI – Most Asian currencies were steady against the dollar in early trade Tuesday as the dollar index pared some gains and closed at 100.85 Monday after the US services purchasing managers index data was released. The dollar index had hit a high of 101.16 Monday. The US Services PMI fell to 54.0 in June, down from 54.5 in May, but in line with market expectations. Although lower than the previous month's reading, it still indicates solid expansion in US services activity, albeit at a softer pace, driven by a slowdown in business activity and new orders. 

 

However, dollar strength persisted on expectations that the Federal Reserve will hike interest rates by the end of the year. At 0700 IST, the index was down at 100.80 from 100.85 Monday.

 

Brent crude oil prices remained at pre-war levels as shipping through the Strait of Hormuz continued to rise gradually. Between Friday and Sunday, a total of 108 verified ships crossed the key waterway, according to the marine traffic tracker firm Kpler. However, the average number of ships passing through the Strait of Hormuz per day is much lower than the average of around 120 ships before the war began. At 0700 IST, Brent crude oil prices rose to $72.21 per barrel from $71.99 on Monday. 

 

The Philippine peso rose marginally for the second consecutive day to 61.39 per dollar from 61.45 Monday, as the Philippines' annual inflation was 6.4% in June, down from 6.8% in May but higher than the 1.4% recorded in June last year, as per data released Tuesday.  

 

The South Korean won rose 0.3% to 1526.63 a dollar from 1530.45 Monday. The Thai baht fell slightly to 33.29 from 33.25 Monday. The Taiwan dollar was steady at 32.06 Tuesday. Chinese yuan was also broadly steady at 6.79 a dollar Tuesday. (Divya Moolayattil)

End

 

US$1 = INR 94.9675

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

 

Edited by Saji George Titus

 

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