Top Wall Street bank pitches options play to ride potential Indian rupee rally to 83
Goldman Sachs' sales and trading desk is recommending an options play on the Indian rupee that will pay off if the South Asian currency rallies to 83 per U.S. dollar over the next nine months.
ADVERTISEMENT The call - effectively a bet on a 3% appreciation in the rupee from its current level of 85.50 - is underpinned by India's improving macroeconomic fundamentals, a revival in foreign inflows, lower oil prices, and the potential for a U.S.-India trade deal.
The rupee has lagged behind its Asian peers this year, showing little response to the dollar index's more than 9% decline.
Goldman Sachs is recommending buying a 9-month USD/INR binary put option with a strike price of 83. A binary put option is a type of digital option that pays a fixed amount if the currency pair settles below the strike level at the expiry of the contract. "We chose 9-month tenor for the trade as INR typically tends to appreciate during India's financial year end", which concludes on March 31, according to a sales note from Goldman Sachs. In support of their constructive outlook on the rupee, Goldman Sachs analysts highlighted that India's GDP growth accelerated to 7.4% year-on-year in the March quarter from 6.4% in the previous three months.
ADVERTISEMENT Their monthly activity tracker indicates that consumption remained robust in April.
The investment bank's note pointed to a return of foreign equity inflows, with over $4 billion flowing into Indian equities over the past two months. Goldman expects this trend to continue and potentially accelerate, driven by improving corporate earnings.
ADVERTISEMENT
The possibility of a U.S.-India trade deal and lower oil prices could be other catalysts for the rupee. Goldman said that a rollback of the 10% reciprocal tariff would be seen as a positive development for Indian risk assets and the rupee. While the U.S. had initially proposed a 26% levy on Indian shipmemts, the country-specific tariffs have been paused until July 8.
ADVERTISEMENT On oil, Goldman's commodities research team expects Brent crude to average $60 for the remainder of 2025 and fall to $56 in 2026. Lower energy prices are a net positive for oil-importing countries like India and could support the rupee.
(You can now subscribe to our ETMarkets WhatsApp channel)
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
India.com
19 minutes ago
- India.com
15 months on, Indian army still awaits delivery of Apache Helicopters from the US, signed Rs 50100000000 agreement to buy…., delay reported due to…
15 months on, Indian army still awaits delivery of Apache Helicopters from the US, signed Rs 50100000000 agreement to buy...., delay reported due to... More than a year after the Indian Army created its first Apache attack helicopter squadron, the actual helicopters are still nowhere in sight. The squadron was set up in March 2024 at Nagtalao in Jodhpur, but it hasn't become operational yet, simply because the Apache AH-64E helicopters promised by the United States have not arrived. India had signed a USD 600 million agreement (current rate: 50,100,000,000 INR)with the US in 2020 to buy six Apache helicopters for the Army. As per the original plan, the first three were supposed to be delivered by May or June 2024. That deadline came and went. The delivery was then postponed to December 2024, reportedly due to global supply chain problems. But now even that date has passed, and there's still no word on when the helicopters will finally land in India. According to officials from the Defence Ministry, the delay is due to technical problems on the US side. Meanwhile, Indian Army pilots and support teams who were trained and ready months ago are stuck waiting, with nothing to fly. This is in contrast to the Indian Air Force, which had received 22 Apache helicopters earlier under a separate deal made in 2015. The delay for the Army has therefore become even more frustrating, as the squadron remains incomplete and idle despite all preparations.
Time of India
22 minutes ago
- Time of India
AMD AI Chip Market: AMD sees AI chip market exceeding $500 billion by 2028, ET Manufacturing
Advt Advt Advanced Micro Devices (AMD) Chief Executive Lisa Su has said that the chipmaker sees the artificial intelligence processor market topping $500 billion by Silicon Valley company said the market is likely to grow at over 60 per cent annually to exceed USD 500 billion, from being a $45 billion opportunity in the company's flagship Advancing AI 2025 conference here on Thursday, Su said the growth will be led by the inferencing work, which is a shift from training."What I can tell you based on everything that we see today is that that number is going to be exceeding USD 500 billion by 2028," Su company unveiled the "MI350 Series GPUs (graphic processing units)" at the flagship event along with a host of other said opting for the newly launched chips may be beneficial for customers, claiming that they issue up to 40 per cent more tokens per can be noted that Nvidia is generally considered an entrenched player in the GPUs market, and the demand for its chips is very high. There are waiting periods as well for the her address, Su said that seven of the 10 largest AI customers, including the largest Indian telco Reliance Jio, are deploying AMD Instinct Accelerators at had last year announced the MI350 and announced that the same offering, which has displayed a four-times increase in compute as compared to the previous generation, is in production now and will be commercially available from the third quarter her address, Su spoke with a slew of clients and partners, including OpenAI chief executive Sam Altman , and senior executives from other companies like Meta, Microsoft and Oracle Su said the company is focused on open architecture as a fundamental tenet in its approach to serving the AI world, an aspect which is different from the approach adopted by company also launched a developer cloud access programme, under which it will grant access to the developer community to try and use its offerings said the company believes that innovation happens faster when something is thrown open for the developers, and backed it up by citing examples from history as also showcased the 'Helios AI Rack Scale' solution, a fully integrated AI platform and announced that the same will be available from the next year onwards.
Time of India
25 minutes ago
- Time of India
Israel-Iran war impact: Adani Ports shares fall 3% amid threats to Haifa Port
Adani Ports shares declined over 3% on Friday. This drop followed escalating Israel-Iran tensions and threats to Haifa Port. Houthi rebels threatened the Israeli port operated by APSEZ. In its Q4FY25 quarterly filings, APSEZ said that the company had made significant progress on Haifa Port on both fronts viz. integration with APSEZ processes and the signing of a union agreement in April 2025. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Shares of Adani Ports and Special Economic Zone (APSEZ) dropped over 3% on the NSE on Friday, hitting an intraday low of Rs 1,402, as investors assessed the potential impact of escalating Israel-Iran tensions on Haifa reports indicated that Iran-backed Houthi rebels had threatened to target Haifa, Israel's largest port, which is operated by decline followed Israel's strikes on military and nuclear sites in Iran earlier in the day, which reportedly resulted in the deaths of key military commanders and nuclear scientists, heightening fears of a broader regional attack is expected to jeopardise the US-Iran nuclear talks set for Sunday in strikes had a significant impact on the Asian markets, including India. India's headline index Nifty fell by over 400 points or 1.6% to hit the day's low of 24,473 while the BSE Sensex plunged by over 1,300 points to touch the bottom of 80,354.59/.The selling pressure was seen across sectors with banks, auto, and energy stocks getting most severely major Asian indices were also down, reacting to the development. While Japanese Nikkei and Hong Kong's Hang Seng were down by nearly 1% around 1:30 India time, China's Shanghai Composite index and Singapore's FTSE Straits Times Index were down 0.4% its Q4FY25 quarterly filings to the exchanges, APSEZ said that the company has made significant progress on Haifa Port on both fronts viz. integration with APSEZ processes, including the appointment of a senior leadership team at the site and the signing of a union agreement in April 2025. The agreement will lead to significantly higher productivity and efficiency at the port, the filing had claimed, adding that during FY25, Haifa Port's Earnings Before Interest, Taxes, Depreciation and Amortisation (EBITDA) increased by 36% company had posted stronger-than-expected quarterly results with a 50% year-on-year increase in consolidated net profit at Rs 3,023 crore for the quarter ended March 2025, compared to Rs 2,025 crore a year earlier. Revenue rose 23% to Rs 8,488 crore, while EBITDA climbed 24% to Rs 5,006 crore, reflecting broad-based strength across the company's ports, logistics, and marine services businesses.
