FX – WEEKLY UPDATE :

Weekly SYNOPSIS: 17/07/2026

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Currency Map:

 

Currency Pairs	WEEK CLOSE	PRIOR WEEK CLOSE	% change
USD/INR	96.29	95.31	1.04
EUR/INR	110.34	109.08	1.15
GBP/INR	129.83	128.02	1.41
JPY/INR	59.35	59.02	0.54

Brent Crude closed at USD 88 VS previous week close of USD 76. Gold closed at USD 4012. Nifty closed at 24334 vs prior week close of 24206. 10 Year G-SEC Yield is now at 6.78%.

Major developments: USDINR traded in the 95.58-96.40 range last week, and Rupee declined One Rupee w/w against USD. EUR climbed 1.15% w/w and GBP climbed 1.41% w/w against Rupee. USDINR fwd premia closed at 2.87% for 1 year.

Indian benchmark Equity indices climbed 0.52% w/w. 10 Year G-SEC Yield closed at 6.78%.

FX reserves stood at USD 675.15 bn, as on July 10 th. Reserves climbed 964 mn w/w.

In July, FII’S have bought Rs 13678 Cr of Indian Equities and have bought Rs 3202 cr of debt.

Rupee declined steeply to 96.40 as Crude broke through USD 80 and climbed to USD 88. US imposed naval blockade and Iran closed Hormuz straits. Situation has escalated with US and Iran hitting economic infrastructure across Gulf.

Rupee weakness persists despite FII inflows into Equity and debt market this month. FCNR flows is targeted at USD 30-USD 50 bn before Sept.

CPI hit 4.38% in June, crossing RBI’S mid range target of 4% after 17 months. Food inflation climbed to 5.32% from 4.78% in June. Increase in fuel prices is the primary reason for inflation climb. Indian WPI climbed to 9.87% in June from 9.68% in May.

June Merchandise trade deficit was reported at US D 30.43 bn. Exports moderated to USD 40.4 bn vs USD 45.20 bn in May  and Imports also declined to USD 70.84 bn vs 73.41 bn in May. Services ​exports was at $33.03 billion in June and services imports was at $17.92 billion, leading to an estimated services ​trade surplus of $15.11 billion.

Indian Current account deficit was USD 2 bn in May and BPO deficit was USD 4.4 bn. Merchandise trade deficit was USD 27.9 bn, services surplus was USD 15.7 bn and remittances was USD 13.6 bn. Nett income transfer was USD 3.4 bn. Nett FDI was flat and FPI outflow was USD 4.7 bn.

Goldman Sachs said that foreign funds would flow into India and trigger next wave of bull rally, citing resilient macro economic conditions and consumer demand.

Technically, USDINR has supports at 95.80/95.60/95.30 levels. Major low has been made at 94.15. Next resistance is 96.96 (previous high).

Hedging advise: Hedging be done according to policy objectives.

Global developments: Markets go into weekend with deepening global semiconductor selloff and growing concern that the US-Iran conflict could enter a far more dangerous phase, US hit Iranian economic infrastructure like Bridges, rail stations and airports. Iran responded hitting US bases in Bahrain, Kuwait, Qatar, radar station in Oman and US base in Syria. It is reported that Kuwait desalination plants have also been hit.

Korean Kospi, Nikkei and Nasdaq faced rout as investors turned wary of semiconductor stock valuations. Nikkei declined 4% and Kospi was down 6%. Nasdaq was down 1.4%. The geographical spread of the chip rout suggests markets are reassessing the AI investment cycle rather than simply taking profits after a strong rally.

Currency markets remained subdued as it is still wary of pushing pairs in one direction or the other. Softer US CPI and PPI reports put the greenback under pressure, overshadowing the persistent hawkish rhetoric from Fed Chair Warsh. However, equity weakness and some degree of safe haven flows linked to renewed Middle East tensions eventually limited dollar losses. Crude is up to USD 88 after pausing around USD 85 for few days.

Eurozone inflation slowed to 2.8% in June from 3.2% in May, confirming the flash estimate as underlying price pressures continued to ease. Core inflation and services inflation both moderated.

ECB meeting, SemiConductor stocks performance and US-Iran war situation will be important events to monitor for the week.

Currency technical levels: USDINR: 95.80/95.60/95.25(support) , (Resistance) 96.96

EURINR:109.30(Support),  (Resistance): 112.50

GBPINR: Supports: 126.20(supports), Resistance:130.50/132.50.

JPYINR: Resistance:59.40/60 Supports: 58.50/57.50 (support).