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Mint
17 hours ago
- Business
- Mint
Middle East worries, portfolio inflow hopes feed rupee bears and bulls alike
MUMBAI, June 20 (Reuters) - Lingering concerns over a potential escalation in the Iran-Israel conflict, coupled with expectations of portfolio inflows are fuelling mixed views on the rupee's trajectory for the coming week, traders said. A spike in oil prices from a potential escalation in the conflict could weigh on the rupee, but an upcoming large IPO expected to draw foreign inflows may help recoup recent losses, they added. The rupee has declined little over 1% this month so far, with a large stock of its decline occurring after Israel attacked targets in Iran last Friday. The attacks also raised concerns about disruption of global oil prices, sending Brent crude oil futures to a five-month peak of $79 per barrel hit on Thursday. The currency hit a three-month low on Thursday but eased 0.1% to 86.63 as of 11:05 a.m. on Friday, comforted by a dip in oil prices after the White House said President Donald Trump will decide in the next two weeks whether the U.S. will become involved in the Israel-Iran air war. Meanwhile, expectations that Indian lender HDB Financial's $1.5 billion IPO is likely to draw sizeable inflows could are seen as a positive for the rupee, a trader at a private bank said. The trader pointed out that he would prefer to keep tight stop-losses on speculative positions since the risk of two-way moves next week could be elevated. On the technical front, the dollar-rupee pair is "nearing overbought territory, with a possible dip toward 86.35–85.95 before resuming an uptrend toward 87.80–88.00," said FX advisory firm Mecklai Financial said in a Friday note. On the day, most Asian currencies ticked up as well with the Korean won leading gains. The dollar index eased below the 99 handle while India's benchmark equity indexes, the BSE Sensex and Nifty 50 rose about 0.9% each. (Reporting by Jaspreet Kalra; Editing by Nivedita Bhattacharjee)
Mint
12-06-2025
- Business
- Mint
Rupee ends a tad lower, hurt by corporate dollar bids, outflows
MUMBAI, June 12 (Reuters) - The Indian rupee weakened slightly on Thursday, pressured by corporate dollar demand and likely portfolio outflows even as broad-based dollar weakness boosted its regional peers. The rupee closed at 85.60 against the U.S. dollar, down 0.1% from its close at 85.51 in the previous session. Asian currencies rose with the Taiwanese dollar leading gains with a 1.6% rise while the offshore Chinese yuan rose 0.2%. The dollar index, meanwhile, fell 0.4% to 98, its lowest level in over a month. The rupee was unable to benefit from a broadly weaker dollar in the face of dollar bids from local companies and foreign banks, likely on behalf of custodial clients, traders said. The local currency has been a laggard among its regional peers over 2025 as well, with analysts citing India's external investment deficit among the hurdles that have held it back. On the day, India's benchmark equity indexes, the BSE Sensex and Nifty 50, fell about 1% each on the day, as ambiguity over the U.S-China trade deal and rising Middle East tensions dampened risk appetite. Crude oil prices pulled back on the day after rising over 4% in the previous session in light of Iran's threat to strike U.S. bases in the Middle East region if nuclear talks fail. "Higher oil prices are a dollar positive by way of the U.S. comparative advantage in energy independence," ING Bank said in a note. "Any further developments here could see the dollar favoured for its liquidity – although the yen and Swiss franc would be in demand too," ING said. Dollar-rupee forward premiums, meanwhile, ticked up on the back of a rise in bets on a rate cut by the U.S. Federal Reserve in September after data released on Wednesday showed that U.S. consumer prices rose less-than-expected in May. (Reporting by Jaspreet Kalra; Editing by Mrigank Dhaniwala)
Yahoo
11-06-2025
- Business
- Yahoo
Rupee aided by foreign banks' dollar sales; Asia FX in holding pattern
By Jaspreet Kalra MUMBAI (Reuters) - The Indian rupee nudged higher in early trading on Wednesday, aided by mild U.S. dollar sales by foreign banks, while Asian currencies were steady after the U.S. and China agreed on a framework to ease trade tensions. The rupee was at 85.46 as of 10:00 a.m. IST, up about 0.2% from its close at 85.6025 in the previous session. The South Asian currency, alongside its regional peers, has witnessed range-bound price action over recent trading sessions as concerns over a trade war between the world's two largest economies eased, cooling volatility. At the end of two days of negotiations, U.S. and Chinese officials said on Tuesday the framework also included removing China's export restrictions on rare earths. U.S. Commerce Secretary Howard Lutnick said the framework deal puts "meat on the bones" of an agreement reached last month in Geneva to ease bilateral retaliatory tariffs. "The latest talks appear to be a constructive step forward, reducing the risk of a full-blown trade war," MUFG Bank said in a note. The positive conclusion of the talks "could help Asian currencies to consolidate their recent gains against the US dollar," the note added. Meanwhile, Indian and U.S. officials also made progress in bilateral trade talks in New Delhi, according to Indian government sources. On the day, modest dollar sales from at least two large foreign banks, likely on behalf of custodial clients, helped the rupee out, a trader at a state-run bank said. U.S. consumer price inflation data will be in focus later on Wednesday for cues on the future path of the Federal Reserve's benchmark policy rates. Interest rate futures are currently pricing in about 43 basis points worth of rate cuts over the remainder of 2025. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Mint
11-06-2025
- Business
- Mint
Rupee aided by foreign banks dollar sales; Asia FX in holding pattern
MUMBAI, June 11 (Reuters) - The Indian rupee nudged higher in early trading on Wednesday, aided by mild U.S. dollar sales by foreign banks, while Asian currencies were steady after the U.S. and China agreed on a framework to ease trade tensions. The rupee was at 85.46 as of 10:00 a.m. IST, up about 0.2% from its close at 85.6025 in the previous session. The South Asian currency, alongside its regional peers, has witnessed range-bound price action over recent trading sessions as concerns over a trade war between the world's two largest economies eased, cooling volatility. At the end of two days of negotiations, U.S. and Chinese officials said on Tuesday the framework also included removing China's export restrictions on rare earths. U.S. Commerce Secretary Howard Lutnick said the framework deal puts "meat on the bones" of an agreement reached last month in Geneva to ease bilateral retaliatory tariffs. "The latest talks appear to be a constructive step forward, reducing the risk of a full-blown trade war," MUFG Bank said in a note. The positive conclusion of the talks "could help Asian currencies to consolidate their recent gains against the US dollar," the note added. Meanwhile, Indian and U.S. officials also made progress in bilateral trade talks in New Delhi, according to Indian government sources. On the day, modest dollar sales from at least two large foreign banks, likely on behalf of custodial clients, helped the rupee out, a trader at a state-run bank said. U.S. consumer price inflation data will be in focus later on Wednesday for cues on the future path of the Federal Reserve's benchmark policy rates. Interest rate futures are currently pricing in about 43 basis points worth of rate cuts over the remainder of 2025. (Reporting by Jaspreet Kalra; Editing by Harikrishnan Nair)
Yahoo
10-06-2025
- Business
- Yahoo
India central bank's large rate cut squeezes forward premiums, leaves rupee vulnerable, analysts say
By Nimesh Vora and Jaspreet Kalra MUMBAI (Reuters) -The Reserve Bank of India's surprise outsized rate cut last week will leave the rupee vulnerable to further depreciation by pressuring already depressed foreign exchange forward premiums, several analysts said on Monday. The rupee has underperformed its Asian peers in 2025 amid weak capital flows. A narrowing interest rate differential — with the U.S. Federal Reserve moving slower than the RBI in cutting rates — suggests the Indian currency may continue to lag. MARKET REACTION The 1-month U.S. dollar/rupee forward premium — typically more sensitive to liquidity conditions — fell to 7.5 paisa, its lowest level since November. Meanwhile, the 1-year premium, which is more responsive to rate differential between the U.S. and India, declined to 1.5250 rupees, marking its lowest level in nearly a year. GRAPHIC: WHY IT'S IMPORTANT A drop in dollar/rupee forward premiums makes the rupee less attractive for carry trades, and diminishes the incentive for exporters to hedge future receivables. At the same time, it raises the likelihood that importers—who typically hedge near-term payment obligations—will step up their hedging activity. The decline in premiums - a less favourable rate differential between the U.S. and India - could leave the rupee open to sharper depreciation. CONTEXT Against the backdrop of benign inflation and the need to support growth, the Reserve Bank of India last Friday delivered a larger-than-expected 50 basis point rate (bps) cut, exceeding the 25 bps anticipated by economists. In a further easing move, the central bank slashed the cash reserve ratio for banks. KEY QUOTES "One thing the rupee had going for it is that it offered attractive carry ... with the 50-bps rate cut from the RBI, carry attraction has been reduced," Mitul Kotecha, head of FX and EM macro strategy Asia at Barclays, adding that in an environment where investors are again focussed on carry, the rupee's appeal has been diminished. Falling premiums can be a "mild added headwind" for the rupee amid globally elevated yields, Dhiraj Nim, FX strategist at ANZ Research, said, and pointed out that if India growth data weaken, there could be scope for one more rate cut.
