Latest news with #Jaspreet Kalra
Yahoo
04-08-2025
- Business
- Yahoo
Indian rupee seen under pressure on US tariff worries, RBI policy in focus
By Dharamraj Dhutia and Jaspreet Kalra MUMBAI (Reuters) -The rupee is likely to stay under pressure this week as concerns over steep U.S. tariffs on Indian exports linger, while the Reserve Bank of India's upcoming policy decision also looms large over the currency and government bonds. The rupee closed at 87.54 against the U.S. dollar on Friday, down 1.2% for the week, pressured by persistent foreign portfolio outflows and a 25% levy on Indian exports. While the local unit is hovering near its weakest level since February, fresh tariff announcements on dozens of U.S. trading partners also pushed other Asian currencies to multi-month lows. The dollar index, meanwhile, posted its best weekly gain since 2022 as expectations of a U.S. rate cut in September faded. The odds of a reduction in September rose to 80% after data released on Friday showed that the U.S. economy added fewer jobs than expected, while the unemployment rate rose to 4.2%. Meanwhile, the maturity of a $5 billion dollar-rupee buy/sell swap conducted by the RBI earlier this year will be in focus on Monday. "It would be prudent to break the swap into delivery and rollover. The rupee has probably seen its worst for this quarter and some support will bring it to a desirable level, while not disturbing liquidity, said Alok Singh, group head of treasury at CSB Bank. Traders expect the rupee to trade between 87.00 and 87.80 this week and reckon that the central bank may continue to intervene to limit excessive volatility. Meanwhile, India's 10-year benchmark 6.33% 2035 bond yield, settled at 6.3680% last week, up 2 basis points (bps). Traders anticipate the yield will remain in the 6.33%-6.38% band till the RBI's policy decision on Wednesday. The range could be tested on either side, depending on policymakers' decision and guidance. Although some market participants expect a rate cut, a majority of economists polled by Reuters believe RBI will hold rates steady this time. "While it is a close call, our bias remains for a 25 bps rate cut at the August meeting," Citi said. A drop in India's retail inflation to a more-than-six-year low in June, coupled with expectations that it may slip to a record low in July, have heightened hopes of a rate cut. However, RBI Governor Sanjay Malhotra last month said that the bar for further easing is now higher than it would have been if the stance was still "accommodative". The central bank slashed rates by a steeper-than-expected 50 bps in June and shifted its policy stance to "neutral" from "accommodative". "As the RBI awaits the impact of the large easing it has already done, we believe it will stay put on repo rate changes on 6 August," HSBC said in a note. Key Factors: India ** July HSBC services PMI and composite PMI - August 5, Tuesday (10:30 a.m.) ** Reserve Bank of India's monetary policy decision - August 6, Wednesday (10:00 a.m.)(Reuters poll - no change) U.S. ** June factory orders - August 4, Monday (7:30 p.m. IST) ** June international trade - August 5, Tuesday (6:00 p.m. IST) ** July S&P Global composite PMI final - August 5, Tuesday (7:15 p.m. IST) ** July S&P Global services PMI final - August 5, Tuesday (7:15 p.m. IST) ** July ISM non-manufacturing PMI - August 5, Tuesday (7:30 p.m. IST) ** Initial weekly jobless claims for week to July 28 - August 7, Thursday (6:00 p.m. IST)
Yahoo
04-08-2025
- Business
- Yahoo
Indian rupee seen under pressure on US tariff worries, RBI policy in focus
By Dharamraj Dhutia and Jaspreet Kalra MUMBAI (Reuters) -The rupee is likely to stay under pressure this week as concerns over steep U.S. tariffs on Indian exports linger, while the Reserve Bank of India's upcoming policy decision also looms large over the currency and government bonds. The rupee closed at 87.54 against the U.S. dollar on Friday, down 1.2% for the week, pressured by persistent foreign portfolio outflows and a 25% levy on Indian exports. While the local unit is hovering near its weakest level since February, fresh tariff announcements on dozens of U.S. trading partners also pushed other Asian currencies to multi-month lows. The dollar index, meanwhile, posted its best weekly gain since 2022 as expectations of a U.S. rate cut in September faded. The odds of a reduction in September rose to 80% after data released on Friday showed that the U.S. economy added fewer jobs than expected, while the unemployment rate rose to 4.2%. Meanwhile, the maturity of a $5 billion dollar-rupee buy/sell swap conducted by the RBI earlier this year will be in focus on Monday. "It would be prudent to break the swap into delivery and rollover. The rupee has probably seen its worst for this quarter and some support will bring it to a desirable level, while not disturbing liquidity, said Alok Singh, group head of treasury at CSB Bank. Traders expect the rupee to trade between 87.00 and 87.80 this week and reckon that the central bank may continue to intervene to limit excessive volatility. Meanwhile, India's 10-year benchmark 6.33% 2035 bond yield, settled at 6.3680% last week, up 2 basis points (bps). Traders anticipate the yield will remain in the 6.33%-6.38% band till the RBI's policy decision on Wednesday. The range could be tested on either side, depending on policymakers' decision and guidance. Although some market participants expect a rate cut, a majority of economists polled by Reuters believe RBI will hold rates steady this time. "While it is a close call, our bias remains for a 25 bps rate cut at the August meeting," Citi said. A drop in India's retail inflation to a more-than-six-year low in June, coupled with expectations that it may slip to a record low in July, have heightened hopes of a rate cut. However, RBI Governor Sanjay Malhotra last month said that the bar for further easing is now higher than it would have been if the stance was still "accommodative". The central bank slashed rates by a steeper-than-expected 50 bps in June and shifted its policy stance to "neutral" from "accommodative". "As the RBI awaits the impact of the large easing it has already done, we believe it will stay put on repo rate changes on 6 August," HSBC said in a note. Key Factors: India ** July HSBC services PMI and composite PMI - August 5, Tuesday (10:30 a.m.) ** Reserve Bank of India's monetary policy decision - August 6, Wednesday (10:00 a.m.)(Reuters poll - no change) U.S. ** June factory orders - August 4, Monday (7:30 p.m. IST) ** June international trade - August 5, Tuesday (6:00 p.m. IST) ** July S&P Global composite PMI final - August 5, Tuesday (7:15 p.m. IST) ** July S&P Global services PMI final - August 5, Tuesday (7:15 p.m. IST) ** July ISM non-manufacturing PMI - August 5, Tuesday (7:30 p.m. IST) ** Initial weekly jobless claims for week to July 28 - August 7, Thursday (6:00 p.m. IST) Sign in to access your portfolio
Yahoo
18-07-2025
- Business
- Yahoo
Rangebound patterns tighten rupee's correlation with Indian stocks
By Jaspreet Kalra MUMBAI(Reuters) - The Indian rupee and local equities have been increasingly moving in sync over the past month as muted portfolio flows alongside lingering uncertainty over U.S. tariffs continue to cloud investor sentiment. The rupee's 30-day correlation with the benchmark Nifty 50 index has tightened to 0.66, the highest level since mid-May, pointing to the currency's increased sensitivity to moves in local stocks. On the day, the Nifty 50 was down about 0.6%, while the rupee dipped to last quote at 86.2025 per U.S. dollar as of 10:50 a.m. IST, down 0.1%. Local equities diverged from regional peers, led by losses in financial stocks. Asian currencies, meanwhile, were trading mixed and the dollar index was little changed at 98.5. Amidst the largely rangebound moves, the rupee's 1-month implied volatility has eased to a near one-month low of 4.2%, while the stock volatility gauge, India VIX, has retreated to 11.6 from around 14 a month earlier. Foreign portfolio flows, a key driver for both the rupee and local stocks, have also been muted, contributing to rangebound price action, a trader at a state-run bank pointed out. Both the local equity and FX markets are "lacking a clear direction right now," said Apurva Swarup, vice president at Shinhan Bank India, referring to the rangebound moves. News on the U.S.-India trade deal would be key to watch, as it could push stocks and the rupee to move out of their prevailing ranges, Swarup added. The United States is very close to a trade deal with India, U.S. President Donald Trump said earlier this week. Country-specific reciprocal tariff rates on exports to the U.S. are slated to go into effect starting August 1. On the day, dollar bids from foreign and local private banks weighed on the rupee, with traders also pointing to heightened demand to buy dollars at the daily reference rate. 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
