FX – WEEKLY UPDATE :

Weekly SYNOPSIS: 05/06/2026

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Currency Map:

Currency Pairs	WEEK  CLOSE	PRIOR WEEK CLOSE	% change
USD/INR	94.94	95.05	-0.11
EUR/INR	110.83	111.12	-0.26
GBP/INR	128.10	128.18
JPY/INR	59.64	59.89	-0.41

Brent Crude closed at USD 93 VS previous week close of USD 92. Gold closed at USD 4329. Nifty closed at 23366 vs prior week close of 23547. 10 Year G-SEC Yield is now at 6.97%.

Major developments: USDINR traded in the 94.72-95.80 range last week, and Rupee gained 0.11% w/w against USD. Rupee had a two way swing in the 94.75-95.80 zone. EUR declined 0.26% w/w and GBP closed flat w/w against Rupee. USDINR fwd premia closed at 2.97% for 1 year.

Indian benchmark Equity indices declined 0.76% w/w. 10 Year G-SEC Yield closed at 6.97%.

FX reserves stood at USD 682.3 bn, as on May 29 th. Reserves climbed USD 938 mn w/w.

In June, FII’S have sold Rs 20977 Cr of Indian Equities and have bought Rs 377 cr of debt.

Rupee gained 83 ps on Friday, as RBI took major steps to boost USD inflows. To boost USD inflow, all taxes for FII investment in all tenors of G-sec’s has been scrapped. FPI investment limits under general route removed and NRI’S/OCI investment in listed Equities will be enhanced. Full hedging cost for banks raising 3- 5 Year FCNR deposits is extended till Sept 30 th.

RBI held repo rates steady ay 5.25% and stance is neutral. FY 27 GDP is lowered to 6.6% and CPI inflation is expected at 5.1% with core inflation at 4.7%.

Q4 GDP grew by 7.8% y/y in JAN-MARCH period. In nominal terms, GDP climbed 8.9%. For the full FY 26, GDP climbed 7.7%. In FY 25, GDP growth was 7.1%.Agri sector grew by 3% in FY 26 as against 4.2% in FY25 (3.65 y/y in Q4). In FY 26,Mfrg climbed 10.7% (7.3% Y/Y in Q4) and Services grew by 11%. In Q4, the sector accelerated to 12.4% from 6.3% in Q4 of 2024-25.

On the demand side, Personal consumption grew by 7.7% in FY 26 VS 5.8% in FY25. Capital formation climbed to 8.2% in FY 26 as against 6.2% in FY 25.

May GST Collections rose 3.2% y/y to Rs 1.94 lac Cr. Taxable supplies of Goods rose 26.9% and services grew by 22%, reflecting strong domestic growth.

The Office of the U.S. Trade Representative proposed additional tariffs of up to 12.5% on imports from 60 economies, including India, China, the European Union, and Japan.

May CPI will be released this week.

Technically, USDINR has supports at 94.75/94.50 levels. USD’S rally against majors remains a threat to sustained Rupee gains.

RBI Governor has pledged to rein Rupee weakness and new announcements are to be seen in this context.

Hedging advise: Hedging be done according to policy objectives.

Global developments: USD gained on strong payrolls data. US 10 Year yield climbed to 4.53% and put pressure on US Equities. US Tech index Nasdaq nosedived 4% and S&P declined 2.64%.

US Non-farm payrolls rose 172k in May, nearly double expectations, while April’s gain was revised sharply higher to 179k. Unemployment held steady at 4.3%, and wage growth remained contained, with average hourly earnings rising 0.3% mom and annual growth slowing from 3.6% yoy to 3.4% yoy. Strong payroll growth confirms that employment remains resilient, while slower annual wage growth suggests there is still no clear evidence of a renewed wage-price spiral. For the Fed, the data provide additional room and time to assess how the oil shock is feeding through the broader economy before considering any policy response.

Eurozone economy contracted -0.25 Q/Q in the first quarter of 2026 as trade and investment weakened significantly.

While oil prices initially fell last week on ceasefire hopes, US efforts to halt fighting in Lebanon were undermined after the pro-Iran Hezbollah movement rejected the new truce and Israel said it would not withdraw troops. Progress in US-Iran talks has also stalled. In addition, US and Iran have launched counter attacks, complicating the situation further.

Energy industry executives have recently warned that global petroleum inventories are being steadily depleted as disruptions linked to the Middle East continue. Refiners are reportedly relying more heavily on storage inventories to replace barrels no longer arriving from the region, raising the prospect of tighter supply conditions later in the summer.

US CPI and ECB meeting are important events for the week.

USD is still stuck in a big range against majors. It remains to be seen whether USD will be able to break 1.14 against Euro.

Currency technical levels: USDINR: 94.75/94.50(support) , (Resistance) 95.80

EURINR:110(Support),  (Resistance): 112.75

GBPINR: Supports: 127(supports), Resistance:130.40

JPYINR: Resistance:60.35/61.30 Supports: 59.45 (support).