FX – WEEKLY UPDATE :

Weekly SYNOPSIS: 12/09/2025

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Currency Map:

Currency Pairs	WEEK CLOSE	PRIOR WEEK CLOSE	% change
USD/INR	88.27	88.25
EUR/INR	103.59	103.08	0.50
GBP/INR	119.05	118.92	0.10
JPY/INR	59.87	59.59	0.46

Brent Crude closed at USD 67 VS previous week close of USD 65.50. Gold closed at USD 3643. Nifty closed at 25114 vs prior week close of 24741. 10 Year G-SEC Yield is now at 6.47%.

Major developments: USDINR traded in the 87.95-88.50 range last week, and Rupee  closed flat against USD w/w. EUR climbed 0.50% w/w and GBP climbed 0.10% w/w against Rupee.

Indian benchmark Equity indices climbed 1.50% w/w. 10 Year G-SEC Yield closed at 6.46%.

USDINR fwd premia has edged higher to 2.3% for 1 year as US-Indian Yield differentials widened.

FX reserves stood at USD 698 bn, as on Sep 5 th. Reserves increased by US D 3.73 bn w/w.

In Sept, FII’S have sold 1798 Cr of Indian Equities and have sold Rs 2903  cr of debt.

Rupee declined to 88.50 and cooled on back of RBI intervention.  Tariff uncertainty, FII selling of Equities and consistent importer hedging are keeping pressure on Rupee. Stop loss triggers at 88.35 also contributed to rapid fall to 88.50. However, the long term economic fundamentals (GDP growth, lower inflation, high FX reserves) support Rupee’s gain. Once US rolls back tariff measures and conclude trade deal, Rupee could gain.

Indian CPI inflation edged marginally higher to 2.07% in Aug as against 1.61% in July. Food inflation remained in negative zone at -0.69%. IIP grew by 3.5% in July with manufacturing climbing by 5.4%.

Hedging advise: Export hedging can be done from now till 88.60.

Global developments: Investors are bracing for Fed meeting. Fed is expected to cut rates by 25 bps as employment data was worse than inflation trend. While tariffs will feed into inflation in coming months, the more pressing aspect starring policy makers is the rise in jobless claims and poor Nonfarm payrolls data. Fed statement will offer clue on back to back rate cut in Oct.

USD rebound is limited, despite looming US rate cuts. US stocks continued to climb higher, powered by tech stocks surge. US 10 year yield has declined to 4.06%.

In the U.S., CPI data were broadly in line with expectations. Headline inflation’s 0.4% monthly rise was a touch stronger than forecast, but the annual rate of 2.9% and steady core at 3.1% highlights that inflation is not worsening much under tariff pressures. However, weekly jobless claims soared to 263k, highest since 2021.

ECB held rates steady, but projected lower inflation on period ahead. ECB reiterated the Governing Council’s commitment to a data-dependent stance.

Focus is on US retail sales, Fed and BOE meetings.

Currency technical levels: USDINR: 87.95/87.80 (Supports), 88.60 (resistance),

EURINR:101.10(Support), 104.20/105 (Resistance)

GBPINR: Supports: 116.90 (supports), Resistance:120.70

JPYINR: Resistance:60.25/60.80 Supports: 58.75 (support).