FX – WEEKLY UPDATES :

Weekly SYNOPSIS: 08/08/2025

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Currency Map:

Currency Pairs	WEEK CLOSE	PRIOR WEEK CLOSE	% change
USD/INR	87.61	87.51	0.11
EUR/INR	102.05	99.88	2.17
GBP/INR	117.66	115.34	2.01
JPY/INR	59.48	58.04	2.48

Brent Crude closed at USD 66.50 VS previous week close of USD 69.50. Gold closed at USD 3398. Nifty closed at 24363 vs prior week close of 24565. 10 Year G-SEC Yield is now at 6.39%.

Major developments: USDINR traded in the 87.20-87.95 range last week, and Rupee declined 10 ps against USD w/w. EUR climbed 2.17% w/w and GBP climbed 2.01% w/w against Rupee.

Indian benchmark Equity indices declined 0.80% w/w. 10 Year G-SEC Yield closed at 6.39%.

1-year fwd premia is at 2.05% p.a.

FX reserves stood at USD 689 bn, as on Aug 1 st. Reserves declined US D 9.3 bn w/w.

In Aug, FII’S have sold 11770 Cr of Indian Equities and have bought Rs 3528  cr of debt.

India was rocked by US’s punitive tariff measures. Besides 25% reciprocal tariff, India was singled out for additional 25% tariff for continued buying of Russian Oil. Govt has called US measures unjustified and has pledged to protect Indian economic interests.

Rupee ended the week better than feared. Rupee declined steeply from 87.20 to 87.95 and with help of RBI intervention, clawed back to 85.45, before ending the week at 87.61. Major resistance is expected at around 87.75-88.10 Zone. With major negative news factored, Rupee could regain to 86.80/86.25, if there are positive developments in US-Russia talks over Ukraine issue. Indian Equities continue to decline for the sixth straight week, due to muted earnings and likely GDP dent due to US tariff.

RBI’S intervention at NDF market capped Rupee decline. Decline in Oil prices also helped Rupee to gain.

 

RBI held rates steady at 5.5%. GDP is expected to be 6.5% this year and inflation is projected at 3.1%.

India’s merchandise trade deficit widened to $23.5 billion in July from $20.7 billion in the corresponding period of the previous year. Imports grew by 7.5% from the previous year to $57.5 billion with Oil imports standing at USD 13.8 bn. Gold imports rose to USD 3.13 bn. Exports contracted 1.5% to USD 34 bn.

Indian PMI(services) held steady at 60.7 in July as against 60.5 in June. RBI decision is expected.

Hedging advise: Imports can be hedged at 86.80/86.35 and exports can be hedged at 87.75-88.10 zone.

Global developments: Dollar remained soft, weighed down by Fed easing expectations and buoyant risk appetite. More Fed members have started to press for rate cuts due to softness in labor market and slow down in ISM data. This has increased odds for Sept rate cuts.

US equity markets extended their winning streak despite heightened trade policy noise from Washington. Rally was powered by tech companies due to robust results and pledge to increase investment in US and placate President. Though Semi conductor tariff is hurting, it came with many exemptions and enabled markets to overlook the tariffs. New tariffs came into effect and there was no shakeup in markets.

BoE delivered a widely expected rate cut to 4.00%, but with a much tighter vote split than markets anticipated. Four of the nine Monetary Policy Committee members voted to keep rates unchanged, signaling persistent concerns about upside inflation risks. 

US- Russia are to meet next week for finding ways to end Ukraine war.

Meanwhile, US President has said that other countries buying Russian Oil will also face similar tariffs like India.

Focus will be on US retail sales and CPI.

Currency technical levels: USDINR: 87.45/87.20 (Supports), 87.75/87.95/88.10 (resistance),

EURINR:101.25/100.55(Support), 103.35 (Resistance)

GBPINR: Supports: 116.95 (supports), Resistance:118.75.

JPYINR: Resistance:60.25/60.80 Supports: 59.10/58.35 (support).