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Time of India
3 days ago
- Business
- Time of India
What led to rupee becoming Asia's worst performing currency in May?
After appreciating towards 83.94/$1 levels in April, the combined impact of tariff uncertainties, border tensions and expectations of further monetary easing by the central bank made the rupee the worst performing currency in Asia in May. The rupee weakened 1.27% in May, from 84.48/$1 at the beginning of the month to 85.57/$1 as of May 30, and retreated the most in Asia. Agencies 'There have been unwinding of long rupee positions amid tariff uncertainties while importers are taking advantage of lower forward premiums,' said Kunal Sodhani, head of treasury at Shinhan Bank India. One year dollar-rupee forward premiums fell to 1.94%, from 2.34% in early April. Some positive cues like lower inflation, growth prospects and a softer dollar index have helped the rupee to trade around the 85.50/$1 levels, but global economic factors can add to further weakness. 'A sharp rebound in the US dollar, an unexpected shift in the Federal Reserve's interest rate outlook, or delays in the India-US trade negotiations could dampen optimism in the near future,' said Sugandha Sachdeva, founder of SS WealthStreet, a New Delhibased research firm.
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Business Standard
07-05-2025
- Business
- Business Standard
Rupee ends 38 paise lower at 84.82/$; border tensions weigh on currency
Indian rupee closed lower on Wednesday as tension flared up on the border after India's precision strikes against Pakistan following last month's Kashmir terror attack. The domestic currency ended 38 paise lower at 84.82 after closing at 84.44 against the greenback on Tuesday, according to Bloomberg data. Indian armed forces are fully prepared to respond to any possible Pakistani misadventures that will escalate the situation, military officials said on Wednesday at an official briefing on 'Operation Sindoor'. The Indian armed forces launched a series of strikes on terror infrastructure in Pakistan and Pakistan-occupied Kashmir (PoK) in the early hours of Wednesday. A total of nine sites were targeted by the Indian armed forces. The armed forces said the strikes were 'focused, measured and non-escalatory', and specifically avoided civilian and military facilities. The military strikes against terrorist camps in Pakistan and POK bring focus on the escalation of conflict on to rupee, according to Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP. Meanwhile, the US Dollar Index remains capped below 100.00, still stuck in a wait-and-see range, according to Kunal Sodhani, vice-president of Shinhan Bank. The dollar index — a measure of the value of the US dollar relative to a basket of foreign currencies — was down 0.24 per cent at 99.48. In the first confirmed trade talks, US Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer will travel to Switzerland later this week for negotiations with China, led by Vice Premier He Lifeng. Federal Reserve commentary is important to watch today for future rate trajectory, Sodhani said, adding that 84.25 acts as a support for the rupee while 84.90 a resistance, followed by 85.20 levels. Investors expect Fed officials to remain status quo on key rates as they await clarity on trade policies. In commodities, crude oil prices rose a day after the US cut its forecast for domestic crude production this year. Brent crude price was up 0.42 per cent to $62.41 per barrel, while WTI crude prices were higher by 0.56 per cent at 59.42, as of 3:40 PM.
Time of India
03-05-2025
- Business
- Time of India
Rupee hits a 6-month high at 83.78/$, erases 2025 losses
The rupee strengthened Friday to a peak of 83.78 per dollar, before closing weaker at 84.58, likely due to dollar purchases by the Reserve Bank of India (RBI). The rupee had closed at 84.48/$1on the previous day. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Popular in Markets Mumbai: Renewed overseas interest in Indian equities since April 15 helped the Indian rupee erase all the losses for 2025 and vault to a six-month high past 84 to a dollar through the trading session Friday, upending expectations that the simmering summer of discontent in the Kashmir Valley would also singe the local monetary rupee strengthened Friday to a peak of 83.78 per dollar, before closing weaker at 84.58, likely due to dollar purchases by the Reserve Bank of India (RBI). The rupee had closed at 84.48/$1on the previous dollar inflows in Indian equities and optimism of a trade deal between India and the US acted as tailwinds for the currency. On the other hand, dollar buying from public sector banks, likely on behalf of the RBI and importer hedging demand added pressure on the rupee, traders rupee opened at 84.09/$1 and strengthened to 83.78/$1 in the first few hours of the trade, a level where RBI likely absorbed dollars. The rupee then weakened to 84.51/$1, LSEG data showed."Reasons for the gains remain strong FPI flows, lower Brent crude prices and stronger Asian currencies amid fresh hopes of US-China trade talks. Rising hopes of a US-India trade deal also contributed to INR appreciation," said Kunal Sodhani, vice president, FX and rates at Shinhan Bank currency's sharp moves have also pushed up the rupee's one-month realised volatility, which has risen to an over two-year peak of 5.1%, according to Reuters."The RBI intervened in a big way by buying dollars, and possibly brought $1.5-2 billion on Friday," a currency dealer dollar index, meanwhile, was down 0.3% on Friday at 99.8, LSEG data showed."Until the dollar index remains below 100, I do not see the rupee losing much and there will be a slow move towards 83. There will be some corrections, but I am expecting a trend where the rupee is stronger," said Anil Bhansali, head of treasury at Finrex Treasury like Nomura and MUFG Bank are also expecting the rupee to be on a strengthening trajectory towards 84/$1 levels by December Bank expects the currency to end the year at 84/$1, up from 87/$1 per its earlier forecast.
Economic Times
03-05-2025
- Business
- Economic Times
Rupee hits a 6-month high at 83.78/$, erases 2025 losses
Mumbai: Renewed overseas interest in Indian equities since April 15 helped the Indian rupee erase all the losses for 2025 and vault to a six-month high past 84 to a dollar through the trading session Friday, upending expectations that the simmering summer of discontent in the Kashmir Valley would also singe the local monetary unit. ADVERTISEMENT The rupee strengthened Friday to a peak of 83.78 per dollar, before closing weaker at 84.58, likely due to dollar purchases by the Reserve Bank of India (RBI). The rupee had closed at 84.48/$1on the previous day. Strong dollar inflows in Indian equities and optimism of a trade deal between India and the US acted as tailwinds for the currency. On the other hand, dollar buying from public sector banks, likely on behalf of the RBI and importer hedging demand added pressure on the rupee, traders said. The rupee opened at 84.09/$1 and strengthened to 83.78/$1 in the first few hours of the trade, a level where RBI likely absorbed dollars. The rupee then weakened to 84.51/$1, LSEG data showed. "Reasons for the gains remain strong FPI flows, lower Brent crude prices and stronger Asian currencies amid fresh hopes of US-China trade talks. Rising hopes of a US-India trade deal also contributed to INR appreciation," said Kunal Sodhani, vice president, FX and rates at Shinhan Bank currency's sharp moves have also pushed up the rupee's one-month realised volatility, which has risen to an over two-year peak of 5.1%, according to Reuters. ADVERTISEMENT "The RBI intervened in a big way by buying dollars, and possibly brought $1.5-2 billion on Friday," a currency dealer dollar index, meanwhile, was down 0.3% on Friday at 99.8, LSEG data showed. ADVERTISEMENT "Until the dollar index remains below 100, I do not see the rupee losing much and there will be a slow move towards 83. There will be some corrections, but I am expecting a trend where the rupee is stronger," said Anil Bhansali, head of treasury at Finrex Treasury like Nomura and MUFG Bank are also expecting the rupee to be on a strengthening trajectory towards 84/$1 levels by December 2025. ADVERTISEMENT MUFG Bank expects the currency to end the year at 84/$1, up from 87/$1 per its earlier forecast. (You can now subscribe to our ETMarkets WhatsApp channel)
The Sun
02-05-2025
- Business
- The Sun
Rupee hits six-month high before retreating on dollar bids
MUMBAI: The Indian rupee soared past 84 per U.S. dollar to touch a near six-month peak on Friday before reversing course on the back of likely dollar buying intervention by the central bank, via state-run lenders, traders said. Strong portfolio inflows and culling of bearish positions on the local currency had hoisted it to a peak of 83.78 earlier in the day, its highest since October 2024, but dollar bids from state-run banks and importers ate into the gains. The rupee closed at 84.58, down 0.1% on the day. It rose 1% for the week, though, bolstered by inflows into Indian equities and optimism about a U.S.-India trade deal. U.S. President Donald Trump said earlier this week that he has 'potential' trade deals with India, South Korea and Japan. The rupee's sharp rally over the last two months has pulled it up by over 3%, helping it wipe out most of its losses since Donald Trump's victory in the U.S. elections - and ensuing policy changes - hurt risk assets across the board. But the currency's sharp moves have also pushed up the rupee's 1-month realised volatility, which has risen to an over two-year peak of 5.1%. 'Volatility may continue to persist with 83.44 acting as a strong base, while 85.60 is a broader resistance,' said Kunal Sodhani, vice president at Shinhan Bank India. The dollar index, meanwhile, was down 0.3% on Friday at 99.8, heading into closely watched U.S. labour market data, due later on Friday. Asian currencies rose by 0.6% to 1.4% as signs of easing U.S.-China trade tensions sparked optimism following weeks of tumult. The offshore Chinese yuan touched an over one-peak above 7.23 per dollar. 'The dollar's recovery trend could be put on pause today, but may resume soon as US assets can keep benefiting from the more subdued tone on US trade policy,' ING Bank said in a note.
