FX – WEEKLY UPDATE :

Weekly SYNOPSIS: 19/09/2025

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Currency Map:

Currency Pairs	WEEK CLOSE	PRIOR WEEK CLOSE	% change
USD/INR	88.16	88.27	-0.12
EUR/INR	103.93	103.59	0.32
GBP/INR	119.25	119.06	0.15
JPY/INR	59.78	59.87

Brent Crude closed at USD 66.50 VS previous week close of USD 67. Gold closed at USD 3684. Nifty closed at 25327 vs prior week close of 25114. 10 Year G-SEC Yield is now at 6.51%.

Major developments: USDINR traded in the 87.71-88.33 range last week, and Rupee  gained 11 ps against USD w/w. EUR climbed 0.32% w/w and GBP climbed 0.15% w/w against Rupee.

Indian benchmark Equity indices climbed 0.84% w/w. 10 Year G-SEC Yield closed at 6.51%.

USDINR fwd premia has edged higher to 2.37% for 1 year as US-Indian Yield differentials widened.

FX reserves stood at USD 702.96 bn, as on Sep 12 th. Reserves increased by US D 4.7 bn w/w.

In Sept, FII’S have bought 1038 Cr of Indian Equities and have bought Rs 2808  cr of debt.

Rupee is having a roller coaster ride in last few days. It swung between 87.71 and 88.35 in last 3 sessions of the week. Negative effect of Trump’s order on H1 B Visa will be seen on Monday. Nasscom has said that it will have negative impact on IT companies Global onsite revenue.

Trade deficit was reported at USD 26.49 bn for Aug, lower than USD 29.4 bn during the same period last year. Imports of goods fell by 10.1% from the previous year to $61.59 billion amid lower prices of crude oil and major energy commodities, exports rose by 6.7% to USD 35 bn. US exports declined to USD 6.86 bn in Aug from USD 8.01 bn in July. Gold imports increased to $5.4 billion in the previous month as against USD 3.9 bn in July, Crude bill decreased to USD 13.2 bn in Aug as against US D 15.5 bn in July. Combined trade and services deficit was reported at USD 9.9 bn for Aug. Services exports stood at USD 34.1 bn in Aug. Services imports was at USD 17.45 bn. Overall trade deficit in April-August of this financial year stood at $41.4 billion, down 20.1% over its level in the April-August 2024 period.

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

Global developments: USD rebounded, yields settled higher after early decline and Equity rally continued after Fed’s balancing act. Though Fed started rate cut cycle, it was less dovish than expected and sounded confidence on economic resilience.

Fed cut rates by 25 bps to a target range of 4 to 4.25% and indicated two more rate cuts in 2025. Fed Chairman, speaking at his post-decision press conference, described the move as a “risk-management” step, saying officials wanted to guard against the possibility of a sharper rise in unemployment. 

USD rebounded after initial sell off as Fed statement was considered less dovish than expected. GDP forecasts were revised higher across the board, to 1.6% in 2025, 1.8% in 2026, and 1.9% in 2027. The unemployment outlook was left unchanged at 4.5% in 2025, but core inflation is expected to climb, signaling that price pressures may remain. In his press meet, Fed Chairman said that rate cut is more of “risk management”, implying flexibility, depending on data.

BoE left its Bank Rate unchanged at 4.00% today, in line with expectations. Policymakers reiterated that a “gradual and careful” approach remains appropriate, with the timing of further easing dependent on the extent of disinflation. The statement stressed that policy is not on a pre-set course and will respond flexibly to new data.

Currency technical levels: USDINR: 87.95/87.70 (Supports), 88.45 (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).