Latest news with #IndiaPakistanTruce
Reuters
13-05-2025
- Business
- Reuters
Two truces bring multi-pronged relief for Indian rupee
MUMBAI, May 13 (Reuters) - The cessation of military hostilities between India and Pakistan and a tariff truce between the United States and China brought relief for the rupee on Tuesday, helping the currency recoup nearly all of its losses from the previous week. The rupee strengthened to a peak of 84.6350 before paring gains to quote 0.5% higher at 84.9175 against the U.S. dollar. Dollar-rupee forward premiums and volatility expectations eased after the two nuclear-armed neighbours announced a truce over the weekend following four days of intense fighting. India's currency markets were closed on Monday for a local holiday. The rupee found support from another tailwind after the U.S. and China agreed to reduce reciprocal tariffs temporarily, easing fears of a global economic carnage from a trade war between the two largest economies. Easing worries about the conflicts were also reflected in the fall in the cost of hedging against rupee depreciation and in a tempering of near-tenor volatility expectations that came off multi-year peaks. The 1-year dollar-rupee implied yield eased 12 basis points to 2.15% while the 1-month implied volatility retreated to under 6% after hitting a peak of 7.1% on Friday. The 1-month dollar-rupee option volatility skew also eased after spiking last week on the back of a likely surge in demand for options betting on the rupee's decline. Despite the boost to risk sentiment delivered by the two truces, MUFG Bank pointed out that it'll be key to watch not only where U.S. tariffs on China end up on an absolute basis, but also where the tariffs on other Asian countries stand relative to China. "This is perhaps most relevant for the likes of India, Malaysia, Vietnam and Thailand which are most likely to be able to substitute China's exports," the note said. India has offered to slash the tariff gap with the U.S. by two-thirds in a dash to seal a trade pact with the U.S., Reuters reported last week.
Reuters
13-05-2025
- Business
- Reuters
India-Pakistan truce, yuan boost to lift rupee past 85/USD
MUMBAI, May 13 (Reuters) - The Indian rupee is expected to appreciate past the 85 mark against the U.S. dollar at the open on Tuesday, supported by the India-Pakistan truce and a rally in the Chinese yuan on the back of the U.S.-China trade agreement. The 1-month non-deliverable forward indicated that the rupee will open at 84.70-84.75 to the U.S. dollar compared with 85.37 on Friday. India's forex and money markets were off on Monday. The rupee experienced significant volatility last week, with traders reacting to news surrounding the India-Pakistan conflict. The Indian currency fluctuated within the 84.12-85.84 range, with the Reserve Bank of India likely intervening on Friday to provide support. "This week is expected to be less turbulent," said a currency trader at a Mumbai-based bank. "I expect the rupee to rally to at least the 84.30-84.40 region, especially with positive developments on the U.S.-China front complementing the good news (about) India and Pakistan." India and Pakistan agreed to a ceasefire on Saturday following four days of cross-border strikes and retaliatory attacks. Although there were violations in the immediate aftermath, the truce has held since then. Indian equities soared on Monday, logging their best day in more than four years. The temporary pause in the U.S.-China trade war boosted Asian currencies and equities, alleviating worries of an economic slowdown. Following talks, both sides agreed that the U.S. would drop levies on Chinese imports from 145% to 30% during a 90-day negotiation period and that China would cut duties from 125% to 10%. The offshore Chinese yuan rose past 7.18 to the U.S. dollar, a six-month high. "In the short term, this 90-day reprieve increases optimism that the worst-case outcome (U.S. stagflation) will be avoided," ANZ Bank said in a note. U.S. equities rallied Monday, yields rose, and the dollar advanced against its major peers. KEY INDICATORS: ** One-month non-deliverable rupee forward at 84.94; onshore one-month forward premium at 18.75 paise ** Dollar index at 101.62, rallied 1.3% on Monday ** Brent crude futures down 0.3% at $64.7 per barrel ** Ten-year U.S. note yield at 4.45% ** As per NSDL data, foreign investors bought a net $286 million worth of Indian shares on May. 8 ** NSDL data shows foreign investors sold a net $64.5 million worth of Indian bonds on May. 8
Bloomberg
13-05-2025
- Business
- Bloomberg
Trump's Diplomatic Frenzy Spins Big Gambles as Signs of Success
It was the kind of week that would make even a seasoned diplomat's head spin: China trade talks, India-Pakistan truce, a ceasefire with the Houthis and Iran nuclear negotiations. Not to mention a Gaza hostage release, new trade framework with the UK and the tantalizing prospect of ending Russia's war in Ukraine. For President Donald Trump's boosters, these are proof that his hard-charging America First foreign and trade policies are yielding results better and faster than his predecessors could only imagine.
