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Reuters
10-07-2025
- Business
- Reuters
Rupee likely to open slightly higher, tracking Asia; Trump tariff impact muted
MUMBAI, July 10 (Reuters) - The Indian rupee is likely to open marginally higher on Thursday, supported by the uptick in Asian peers and muted reaction to U.S. President Donald Trump's latest tariff announcements. The 1-month non-deliverable forward indicated the rupee will open at 85.60-85.62 compared with 85.6725 in the previous session. The rupee has fluctuated between 85.30 and just below 86 over the past week, testing both sides of its recent range. In recent sessions, the rupee has been "choppy within a well-defined range," a currency trader at a private bank said. "The consensus trade right now—both among corporates and interbank—is to buy USD/INR near 85.20–85.40 and sell near 85.90–86.10," the trader said. "It makes sense when you consider that there have been no major trigger points." Investors largely shrugged off U.S. President Donald Trump's latest tariff salvo. Having already announced a 50% tariff on copper imports, Trump said the levies would take effect from August 1. Further, he threatened a punitive 50% tariff on Brazil's exports to the United States, while issuing tariff notices to seven smaller trading partners. Asian currencies and shares rose, indicating waning market sensitivity to Trump's tariff moves. The dollar index inched lower. Meanwhile, minutes of the Federal Reserve's June meeting showed narrow support for rate cut later this month. Most participants at the Fed's meeting did anticipate rate cuts would be appropriate later this year, with any price shock from tariffs expected to be "temporary or modest". MUFG Bank noted that, looking ahead, the market's attention may shift toward the Fed's policy path, which will be key to shaping the dollar's trajectory. KEY INDICATORS: ** One-month non-deliverable rupee forward at 85.70; onshore one-month forward premium at 8.75 paise ** Dollar index down at 97.35 ** Brent crude futures at $70.2 per barrel ** Ten-year U.S. note yield at 4.33% ** As per NSDL data, foreign investors bought a net $33.2mln worth of Indian shares on July 8 ** NSDL data shows foreign investors bought a net $138.2mln worth of Indian bonds on July 8
Asharq Al-Awsat
02-07-2025
- Business
- Asharq Al-Awsat
Dollar Near 3-1/2 year Low as Fed Easing, Trump Bill in Focus
The US dollar edged off multi-year lows against major peers on Wednesday though remained under pressure as traders considered the potential impact of President Donald Trump's spending bill, and looming tariff deadlines. Market participants are in a holding pattern until they get clarity on those matters and as they await US jobs data for June. The euro was down 0.33% at $1.1770, on Wednesday, but close to its highest since September 2021 hit Tuesday, and the pound was down 0.15% at $1.3722, after hitting a three-and-a-half year top the previous day, Reuters reported. With the dollar up 0.4% on the Japanese yen at 143.97, that left the dollar index, which measures the currency against six major counterparts, slightly higher at 96.744, but near its overnight over three-year low. A plethora of factors has weighed on the US currency this year, and it has had its worst first half of a year since the era of free-floating currencies began in the early 1970s. These include policy uncertainty that makes asset managers jittery about some US holdings and spurs them to increase currency hedges, an unwinding of stretched long dollar positioning, and increased bets in recent weeks on the Federal Reserve easing this year. Traders were keeping an eye on the European Central Bank's annual conference in Sintra, Portugal, where Fed chair Jerome Powell reiterated on Tuesday that the Fed is taking a patient approach to further rate cuts. Still, he did not rule out a reduction at this month's meeting, saying everything depended on incoming data. That raises the stakes for the monthly non-farm payrolls report on Thursday - a day earlier because of Friday's July 4 holiday. Indications of labor market resilience in the US JOLTS figures overnight saw the dollar rise off Tuesday's lows. "Weaker economic data is still ultimately needed for (US rate cuts) and the JOLTS data throws up further doubts over the timing of a more pronounced labor market downturn that would encourage the Fed to restart monetary easing," said Derek Halpenny, head of research, global markets EMEA, in a note. Traders are keeping a close watch on Trump's massive tax-and-spending bill, which could add $3.3 trillion to the national debt. The bill, passed by the US Senate, will return to the House for final approval. "The confirmation that this is an increase in issuance, an increase in government spending well beyond its means, is not necessarily good news for the Treasury market, and it's arguably one of the reasons the dollar's going down," said Rodrigo Catril, a strategist at National Australia Bank. Also weighing on the US currency has been Trump's continued efforts to get Powell to cut rates, putting Fed independence in the spotlight. On Monday, Trump sent the Fed chair a list of global central bank key rates adorned with handwritten commentary, saying the US rate should be between Japan's 0.5% and Denmark's 1.75%, and telling him he was "as usual, 'too late.'"
Reuters
02-07-2025
- Business
- Reuters
Indian rupee range-bound despite weaker US dollar, set to trail most Asian peers: Reuters poll
BENGALURU, July 2 (Reuters) - The Indian rupee will trade in a narrow range over the next six months as global risk-off sentiment slows capital inflows to a trickle, potentially offsetting gains from a weaker U.S. dollar, a Reuters poll of FX analysts showed. Despite the dollar index (.DXY), opens new tab falling nearly 11% so far this year, the rupee has remained largely stable. The Reserve Bank of India has been shoring up its reserves to near record levels to limit volatility and to meet dollar obligations when needed. Foreign portfolio investors have been net sellers of Indian assets this year. Most strategists in the June 30–July 2 Reuters poll said they did not expect the rupee to make any meaningful gains. This comes even as global investors sell American assets over concerns rising debt levels in the world's largest economy are unsustainable in the long run. In three months the rupee is forecast to be down around 0.1% from current levels at 85.75 per dollar. It is then expected to trade at 85.50 in six months and weaken marginally to 86.13 in a year, according to the median forecast of 41 FX strategists. "The overall trend for USD/INR should be downward, with the Fed cutting rates, the dollar index falling and possibly a breakthrough on the U.S. trade deal in the coming days," said Anil Bhansali, head of treasury at Finrex Treasury Advisors. "It's going to be a slow and steady journey for the rupee because the RBI is currently buying dollars to meet its liabilities." U.S. President Donald Trump said on Tuesday a trade deal could be reached with India. The rupee has been a laggard compared to most regional peers, down around 0.1% for the year. The Korean won, Thai baht, Malaysian ringgit and Singapore dollar have gained more than 5%. However, the RBI's recent policy stance shift to "neutral," signalling the end of its brief rate-cutting cycle, may help underpin the currency. "(Given) better growth prospects, with a lot of monetary and fiscal stimulus being front-loaded and the expectation India might end up benefiting on the trade front compared to peers, there is a case for the rupee to somewhat appreciate from where we are today," said Sakshi Gupta, principal economist at HDFC Bank. (Other stories from the July foreign exchange poll)
Yahoo
02-07-2025
- Business
- Yahoo
Dollar wallows near 3-1/2-year low as Fed easing, Trump bill in focus
By Kevin Buckland and Alun John TOKYO/LONDON (Reuters) -The U.S. dollar languished near its lowest since February 2022 against major peers on Wednesday as traders considered the potential impact of President Donald Trump's spending bill, and looming tariff deadlines. Market participants are in a holding pattern until they get clarity on those matters and as they await U.S. jobs data for June, and the dollar inched up slightly but remained near recent lows. The euro was down 0.3% at $1.1774, on Wednesday, but close to its highest since September 2021 hit Tuesday, and the pound was down 0.15% at $1.3722, after hitting a three-and-a-half year top the previous day. With the dollar up 0.3% on the Japanese yen at 143.8, that left the dollar index, which measures the currency against six major counterparts, slightly higher at 96.744, but near its overnight over three-year low. A plethora of factors has weighed on the U.S. currency this year, and it has had its worst first half of a year since the era of free-floating currencies began in the early 1970s. These include policy uncertainty that makes asset managers jittery about some U.S. holdings and spurs them to increase currency hedges, an unwinding of stretched long dollar positioning, and increased bets in recent weeks on the Federal Reserve easing this year. Traders were keeping an eye on the European Central Bank's annual conference in Sintra, Portugal, where Fed chair Jerome Powell reiterated on Tuesday that the Fed is taking a patient approach to further rate cuts. Still, he did not rule out a reduction at this month's meeting, saying everything depended on incoming data. That raises the stakes for the monthly non-farm payrolls report on Thursday - a day earlier because of Friday's July 4 holiday. Indications of labour market resilience in the U.S. JOLTS figures overnight saw the dollar rise off Tuesday's lows. "Weaker economic data is still ultimately needed for (U.S. rate cuts) and the JOLTs data throws up further doubts over the timing of a more pronounced labour market downturn that would encourage the Fed to restart monetary easing," said Derek Halpenny, head of research, global markets EMEA, in a note. Traders are keeping a close watch on Trump's massive tax-and-spending bill, which could add $3.3 trillion to the national debt. The bill, passed by the U.S. Senate, will return to the House for final approval. "The confirmation that this is an increase in issuance, an increase in government spending well beyond its means, is not necessarily good news for the Treasury market, and it's arguably one of the reasons the dollar's going down," said Rodrigo Catril, a strategist at National Australia Bank. Also weighing on the U.S. currency has been Trump's continued efforts to get Powell to cut rates, putting Fed independence in the spotlight. On Monday, Trump sent the Fed chair a list of global central bank key rates adorned with handwritten commentary, saying the U.S. rate should be between Japan's 0.5% and Denmark's 1.75%, and telling him he was "as usual, 'too late.'" 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
Reuters
02-07-2025
- Business
- Reuters
Rupee dips alongside Asian peers; tariff deadline, Fed cut path in focus
MUMBAI, July 2(Reuters) - The Indian rupee weakened slightly on Wednesday, tracking modest declines in its regional peers while investors kept their focus on a looming U.S. tariff deadline as well as cues on the future path of the Federal Reserve's benchmark policy rates. The rupee dipped about 0.2% to 85.6850 per U.S. dollar as of 11:15 a.m. IST. Asian currencies were mostly lower as well, while the dollar index rose 0.1% to 96.7, supported by stronger-than-expected U.S. economic data that lent credence to the Fed's stance of being patient on cutting interest rates. Fed Chair Jerome Powell on Tuesday reiterated that the U.S. central bank plans to "wait and learn more" about the impact of tariffs on inflation before lowering interest rates. Traders expect the rupee to be range-bound in the near term, with the U.S. non-farm payrolls report due on Thursday and developments on U.S.-India trade negotiations expected to provide directional cues. At this juncture, the rupee is expected to log two-way price action with resistance pegged in the 85.45-85.50 zone, a trader at a mid-sized private bank said. Persistent dollar bids from state-run banks around that level have also prompted speculation among traders that the Reserve Bank of India may be stepping in to absorb dollar inflows. The United States could reach a trade deal with India, President Donald Trump said on Tuesday, paving the way for the South Asian country to avoid a 26% levy that was announced on April 2 and paused till July 9. "We continue to forecast USD/INR to move lower with supportive domestic factors and a possible trade deal with the U.S., with the implicit assumption of a status quo in geopolitical conflicts," MUFG said in a note. The firm expects USD/INR to decline to 84 by the first quarter of calendar year 2026.
