FX – WEEKLY UPDATE :

Weekly SYNOPSIS: 13/02/2025

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Currency Map:

Currency Pairs	WEEK  CLOSE	PRIOR WEEK CLOSE	% change
USD/INR	90.65	90.63
EUR/INR	107.62	106.68	0.88
GBP/INR	123.45	122.74	0.57
JPY/INR	59.20	57.64	2.70

Brent Crude closed at USD 68 VS previous year close of USD 68. Gold closed at USD 5043. Nifty closed at 25471 vs prior year close of 25693. 10 Year G-SEC Yield is now at 6.67%.

Major developments: USDINR traded in the 90.35-90.78 range last week, and Rupee closed flat against USD w/w. EUR climbed 0.88% w/w and GBP climbed 0.57% w/w against Rupee. USDINR fwd premia closed at 2.48% for 1 year.

Indian benchmark Equity indices declined 0.86% w/w. 10 Year G-SEC Yield closed at 6.67%.

FX reserves stood at USD 717 bn, as on Feb 6 th. Reserves declined 6.7 bn w/w.

In Feb 2026 tii date, FII’S have bought Rs 17768 Cr of Indian Equities and bought Rs 1218 cr of debt.

USDINR had a relatively quiet week, trading in a tight range between 90.35 and 90.78. FII’ have started to invest back in Feb, though the amount is still small. US trade deal has stabilized the pair. Surprisingly, RBI intervened to sell USD on Thursday morning. Indian IT stocks declined steeply due to AI related issues. With Q3 result almost closing, listed companies have reported net profit growth of around 10.4% y/y. But performance of Nifty 50 companies has left investors wondering whether the market deserves the present valuation.

Jan CPI climbed 2.75% y/y, based on new series with base year of 2024.New series has wider coverage of goods and services, and new weights given to these goods and services based on consumption patterns revealed in the latest Household Consumption Expenditure Survey (HCES) 2023-24. The total number of items covered under the new series has increased to 358 from the 299 items in the older series. Of these, the number of goods covered has increased to 308 from 259, and the number of services included has gone up to 50 from the earlier 40.  The weightage assigned to the food and beverages category has been revised downward in the new series to 36.75% from the earlier 45.86%. 

USDINR has strong support at 90 and if that breaks, the pair can target 89.25/88.90 levels. The pair faces resistance at 90.85/91.10 levels. Trade deal has shifted expectations of one way declining trend for Rupee. However, for capital flows to come back, stock market has to perform.

Important levels to watch are 90/89.25 on the downside and 90.80/91.10 on the upside.

Hedging advise: Hedging be done according to policy objectives.

Global developments: There was no dominant theme in local FX market and Global markets. US data releases did not shift interest rate expectations from Fed. Surprisingly, US Yields dived lower due to positional dynamics. USD Index stayed tight. US Equity markets experienced volatility due to AI disruption fears. US 10 Year yield declined from Jan high of 4.31% to 4.05% due to partial shift from commodities, which experienced wide swings in a short period of time. FOMC minutes and US Core PCE index are important data releases for upcoming week.

US non-farm payrolls surprised to the upside in January, rising 130k against expectations for just 66k. The gain was also well above the 15k average monthly increase seen through 2025. Unemployment rate edged down from 4.4% to 4.3%, beating forecasts for no change, while the participation rate ticked up 0.1 percentage point to 62.5%. The combination suggests labor supply and demand both strengthened modestly at the start of the year. Wage pressures also remained firm. Average hourly earnings rose 0.4% month-on-month, above the 0.3% consensus, with annual wage growth holding at 3.7% yoy.

This data will aid Fed to remain on pause mode in March meeting.

UK GDP rose just 0.1% mom in December, undershooting expectations for a 0.2% gain and pointing to a subdued end to 2025. Q4 GDP grew 0.1% quarter-on-quarter compared with Q3.

Currency technical levels: USDINR: 90/89.25 (Supports), 91.10 (resistance),

EURINR:106.25/104.30(Support),  (Resistance): 110.30

GBPINR: Supports: 120.35(supports), Resistance:127.40.

JPYINR: Resistance:60.30 Supports: 56.20/54 (support).