FX – WEEKLY UPDATE :

Weekly SYNOPSIS: 07/11/2025

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Currency Map:

Currency Pairs	WEEK CLOSE	PRIOR WEEK CLOSE	% change
USD/INR	88.66	88.70
EUR/INR	102.30	102.67	-0.36
GBP/INR	116.36	116.69	-0.28
JPY/INR	57.81	57.61	0.34

Brent Crude closed at USD 63.50 VS previous week close of USD 65. Gold closed at USD 4000 Nifty closed at 25492 vs prior week close of 25722. 10 Year G-SEC Yield is now at 6.52%.

Major developments: USDINR traded in the 88.34-88.80 range last week, and Rupee gained 4 ps against USD w/w. EUR declined 0.36% w/w and GBP declined 0.28% w/w against Rupee.

Indian benchmark Equity indices declined 0.89% w/w. 10 Year G-SEC Yield closed at 6.52%.

FX reserves stood at USD 689.73 bn, as on Oct 24 th. Reserves declined by 5.67 bn  w/w. Decline is reserves is due to fall in Gold and Currency revaluations.

In Nov, FII’S have sold Rs 4981 Cr of Indian Equities and have sold Rs 1629 cr of debt.

Oct GST collections rose 4.6% to Rs 1.95 lac Cr, despite GST rate cut. GST collections has belied fears of drastic fall in revenue post GST cuts.

HSBC India Services PMI was slightly revised higher to 58.9 in October 2025, up from a preliminary estimate of 58.8 but down from a final reading of 60.9 in September.

RBI intervened on Tuesday opening and ensured that Rupee does not breach 88.80. This is the second big intervention at around 88.80. However, markets bought USD at 88.40 and Rupee declined to 88.71 towards close of the week.

 USDINR fwd premia declined to 2.11% for 1 year.

Important levels to watch are 88.40/87.70 on the downside and 88.85/89.15 on the upside.

Hedging advise: Export hedging can be done regularly.

Global developments: Sentiment dominated markets as key US economic data releases were impacted by Govt shutdown. Court hearing on tariffs and fears over AI stock prices growth dominated market developments. There is a sudden shift in sentiment towards AI stocks as leading economists and bankers cautioned against extreme valuation and exuberance. While some compared the recent run in AI stock prices to the dot com bubble of 1990’s, there was a pushback by Nvidia CEO, who argued that AI growth is still in its infancy stage.

U.S. macro environment grew more complicated. The federal government shutdown stretched into another week, marking the longest in history, with no sign of political compromise in Washington. The impact was seen in airports with forced Fed reduction of ATC’S and hence cancellation/delay of flights.

US Treasury yields and hence FX market can be impacted by US SC decision on legality of Trump tariffs. If overturned, US fiscal arithmetic can get worse and long term yields could climb, even as Fed cuts short term rates.

BOE held rates steady by 5-4 margin. The committee now thinks the risks of missing their 2% inflation target are more balanced; they are less worried about high inflation sticking around and more worried about the economy being too weak. 

Currency technical levels: USDINR: 88.40/87.70 (Supports), 88.85 (resistance),

EURINR:101.60/100.75(Support), 103.15 (Resistance)

GBPINR: Supports: 115 (supports), Resistance:118.50

JPYINR: Resistance:59.05 Supports: 57.30 (support).