FX – WEEKLY UPDATE :

Weekly SYNOPSIS: 18/07/2025

Currency Map:

Thank you for reading this post, don't forget to subscribe!

Currency Pairs	WEEK CLOSE	PRIOR WEEK CLOSE	% change
USD/INR	86.12	85.80	0.37
EUR/INR	100.15	100.28	-0.12
GBP/INR	115.73	116.28	-0.47
JPY/INR	57.93	58.45	-0.88

Brent Crude closed at USD 69.50 VS previous week close of USD 70. Gold closed at USD 3350. Nifty closed at 24968 vs prior week close of 25149. 10 Year G-SEC Yield is now at 6.31%.

Major developments: USDINR traded in the 85.74-86.23 range last week, and Rupee declined 32 ps against USD w/w. EUR declined 0.12% w/w and GBP declined 0.47% w/w against Rupee.

Indian benchmark Equity indices declined 0.71% w/w. 10 Year G-SEC Yield closed at 6.31%.

1-year fwd premia is at 1.98% p.a.

FX reserves stood at USD 696 bn, as on July 11 th. Reserves declined US D 3.05 bn w/w.

In July, FII’S sold 6353 Cr of Indian Equities and bought Rs 299  cr of debt.

Rupee declined 32 ps last week and closed at 86.12. Rupee has gradually weakened from 85.20 levels , touched on July 3 rd. Persistent decline in Equities and FII selling off Equities weighed on Rupee. India- US trade deal and Fed’s approach to monetary policy could decide future path of USDINR. Rupee’s last few weeks of decline, tracks USD’S pull back in last few weeks.

Expect USDINR to trade in the 85.50-86.50 zone in coming weeks.

Hedging advise: Imports can be hedged at 85.50 and exports can be hedged at 86.25-86.50 zone.

 

Global developments: USD climbed and Equities surged as markets looked beyond tariff issues. Resilient economic data and robust corporate earnings provided further impetus to Nasdaq index and US 500 stocks. Solid economic data has provided more time for Fed to cut rates. Though some members are pushing for July rate cut, majority of Fed board remains cautious. USD’S strength and Equity markets resilience was evident despite uncertainty over tariff impact and reports of US President’s move to remove Fed Chairman. US President denied that he is all set to remove Fed Chairman. However, the threat of his action remains and Dollar bulls are nervous of chasing USD higher.

 US retail sales rose 0.6% mom to USD 7201.B in June, well above expectation of 0.2% mom.

June’s inflation report indicated that tariff price pressures were beginning to show up more materially in the economy.

Fed Beige Book noted that “contacts in a wide range of industries expected cost pressures to remain elevated in the coming months, increasing the likelihood that consumer prices will start to rise more rapidly by late summer”.

Currency technical levels: USDINR: 85.50 (Supports), 86.25/86.40 (resistance),

EURINR:99.50/98.50(Support), 101.10/102.35 (Resistance)

GBPINR: Supports: 114.70/113.95 (supports), Resistance:116/117.

JPYINR: Resistance:58.65 Supports: 57.20 (support).