Latest news with #dollarrupee
Yahoo
23-07-2025
- Business
- Yahoo
Rise in overnight swap rate, lower US bond yields boost forward premiums
By Jaspreet Kalra MUMBAI (Reuters) - India's dollar-rupee forward premiums rose across tenors, due to the combined impact of a rise in the cost of borrowing the rupee overnight and a dip in near-term U.S. Treasury yields, while the local currency was flat in the spot market. The dollar-rupee overnight swap rate rose to 0.38 paisa on Wednesday, lifting near-tenor forward premiums to a one-month high and supporting long-term tenors as well, aided by a dip in the one-year U.S. Treasury yield. The one-month forward premium advanced to 12.50 paisa, while the 1-year implied yield rose by 2 basis points to a three-week high of 2.05%. The 1-year U.S. Treasury yield was last at 4.08% after hitting a two-week low overnight. Tighter rupee liquidity in the banking system pushed up the overnight swap rate, according to traders. India's banking system liquidity is currently hovering near a seven-week low but it is expected to improve in next few days, which may help cool off near-tenor forward premiums. On the far end, "there is limited appetite to run a paid position," a trader at a large private bank said, citing rising chances of the Federal Reserve holding interest rates steady for longer and growing expectations of a rate cut by the Reserve Bank of India in its August policy meeting. Meanwhile, in the spot market, the rupee was nearly flat at 86.37 per U.S. dollar as of 12:15 p.m., wedged between positive cues from gains in most regional peers and routine dollar demand from local importers. The dollar index was steady at 97.5, while the Chinese yuan strengthened to a three-week high, buoyed by fresh signs of easing trade tensions and a persistently stronger-than-expected guidance fix by the country's central bank. U.S. and Chinese officials are slated to discuss an extension to the tariff deadline of August 1 for negotiating a trade deal. Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
Reuters
23-07-2025
- Business
- Reuters
Rise in overnight swap rate, lower US bond yields boost forward premiums
MUMBAI, July 23 (Reuters) - India's dollar-rupee forward premiums rose across tenors, due to the combined impact of a rise in the cost of borrowing the rupee overnight and a dip in near-term U.S. Treasury yields, while the local currency was flat in the spot market. The dollar-rupee overnight swap rate rose to 0.38 paisa on Wednesday, lifting near-tenor forward premiums to a one-month high and supporting long-term tenors as well, aided by a dip in the one-year U.S. Treasury yield. The one-month forward premium advanced to 12.50 paisa, while the 1-year implied yield rose by 2 basis points to a three-week high of 2.05%. The 1-year U.S. Treasury yield was last at 4.08% after hitting a two-week low overnight. Tighter rupee liquidity in the banking system pushed up the overnight swap rate, according to traders. India's banking system liquidity is currently hovering near a seven-week low but it is expected to improve in next few days, which may help cool off near-tenor forward premiums. On the far end, "there is limited appetite to run a paid position," a trader at a large private bank said, citing rising chances of the Federal Reserve holding interest rates steady for longer and growing expectations of a rate cut by the Reserve Bank of India in its August policy meeting. Meanwhile, in the spot market, the rupee was nearly flat at 86.37 per U.S. dollar as of 12:15 p.m., wedged between positive cues from gains in most regional peers and routine dollar demand from local importers. The dollar index was steady at 97.5, while the Chinese yuan strengthened to a three-week high, buoyed by fresh signs of easing trade tensions and a persistently stronger-than-expected guidance fix by the country's central bank. U.S. and Chinese officials are slated to discuss an extension to the tariff deadline of August 1 for negotiating a trade deal.
Reuters
12-06-2025
- Business
- Reuters
Interbank traders turn focus to dollar-rupee forwards as spot treads water
MUMBAI, June 12 (Reuters) - India's FX market traders have increased activity in the dollar-rupee forwards market as spot market price action continues to be rangebound on two-sided client flows and the lack of firm cues. The rupee has hovered in the 85.30 to 86.02 range against the U.S. dollar over June so far with its 1-month realised volatility declining to 4.5%, the lowest in about six weeks. Dollar-rupee forward premiums, meanwhile, have witnessed sharper moves, sparked by the Reserve Bank of India's outsized rate cut last week and changes in expectations of U.S. rate cuts. The 1-year dollar-rupee implied yield fell to its lowest in nearly one year earlier this month while the 1-month forward premium has fallen about 4 paisa to its lowest level since November. The fall in dollar-rupee forward premiums leaves the rupee vulnerable to further depreciation by reducing the currency's "carry trade" appeal and diminishing the incentive for exporters to hedge receivables, analysts said. Speculative activity has picked up on forward premiums as markets are "largely playing the range (on spot USD/INR)," a trader at a large private bank said. To be sure, large moves in global foreign exchange markets could spur the dollar/rupee to break out of its prevailing range, said Apurva Swarup, vice president at Shinhan Bank India. If the dollar index breaks below the 98 level, that could unlock room for rupee appreciation from prevailing levels, Swarup said. On Thursday, the rupee was nearly flat against the U.S. dollar at 85.5125 as of 11:00 a.m. IST. Asian currencies were mostly stronger with the offshore Chinese yuan rising 0.2% as the latest trade truce between Washington and Beijing raised hopes that the world's two largest economies could avoid escalations in their tariff row.
Reuters
22-05-2025
- Business
- Reuters
Dollar-rupee forward premiums fall as overnight swap rate softens, US yields rise
MUMBAI, May 22 (Reuters) - Dollar-rupee forward premiums eased across tenors this week as a pullback in the dollar-rupee overnight swap rate coincided with U.S. bond yields climbing a leg higher, lowering the cost of hedging against weakness in the rupee. The 1-year dollar-rupee implied yield, for instance, has fallen about 25 basis points over May so far and was hovering at an over two-month low of nearly 2% on Thursday. Similarly, the 1-month dollar-rupee forward premium has eased to a near 6-month low of about 14-15 paisa on the back of a pullback in the dollar-rupee overnight swap rate. While the dollar-rupee forward premiums had climbed earlier this month when the India-Pakistan conflict flared up, traders pointed out that they have since shed the risk premia and that far forwards could likely keep trending lower amid the rise in U.S. bond yields. The 1-year U.S. Treasury yield has climbed nearly 30 basis points this month amid persistent concerns about the U.S. fiscal situation and uncertainty about the future path of Fed policy rates. A swap trader at a large private bank said he prefers to "receive forward premiums on up-ticks," and that 1-year dollar-rupee implied should ease to about 1.90% in the near term. The rupee, meanwhile, is expected to stay rangebound between 84.50 and 86 in the near term with traders keeping an eye on developments in U.S.-India trade talks and the dollar's overall trajectory. On the day, the rupee dipped slightly to 85.67 per U.S. dollar, compared to its close at 85.6375 in the previous session. Asian currencies were mostly higher between 0.1% and 0.4% while the dollar index eased to 99.5, down for the fourth consecutive session. Persistent worries over the U.S. fiscal situation and uncertainty about the impact of U.S. tariff policies have hurt the dollar and driven it down by over 8% in 2025 so far. "The market's focus on the weakness of the USD is structural," DBS Bank said in a Thursday note.
