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The Indian rupee edged up 15 paise to 88.60 against the US dollar in early trade on Thursday (September 25), recovering from an all-time low as the American currency weakened in overseas markets.
At the interbank forex market, the rupee opened at 88.65 before touching 88.60, reversing some of Wednesday’s (September 24's) 2-paise decline, when it had closed at an all-time low of 88.75.
Forex traders said the currency is under renewed pressure this week due to a combination of global and domestic factors. The hike in H-1B visa fees, continued US tariffs on Indian goods, and persistent foreign fund outflows have weighed on investor sentiment, especially concerning India’s IT services sector.
“The dollar/rupee is testing key levels, with resistance at 89.00–89.20 and support at 88.40. The up move seems driven more by tariffs and visa fee hikes than broad dollar strength. A close below 88.20 could signal a potential trend reversal, while progress on trade talks or a softer dollar index may support a rupee rebound,” said Amit Pabari, MD of CR Forex Advisors.
The dollar index, which measures the greenback against a basket of six major currencies, was down 0.13% at 97.75 an ounce.
Brent crude oil futures traded 0.36% lower at $69.06 an ounce per barrel.
Traders also highlighted quarter-end activity from importers and exporters. While exporters’ dollar sales lent some support to the rupee, importers’ hedging limited the gains.
The currency has declined over 3% this quarter, marking its biggest fall since April 2022.
Economic headwinds are expected to persist, analysts say. Goldman Sachs noted, “The underperformance of rupee reflects negative implications from the new US H1B visa proposals and continued foreign equity outflows.”
On the monetary policy front, Citi joined other major firms in anticipating a potential rate cut by the Reserve Bank of India on October 1, following the Federal Reserve’s recent move.
Dollar-rupee forward premiums remained steady, with the one-year implied yield at 2.36%.
-With agencies inputs
At the interbank forex market, the rupee opened at 88.65 before touching 88.60, reversing some of Wednesday’s (September 24's) 2-paise decline, when it had closed at an all-time low of 88.75.
Forex traders said the currency is under renewed pressure this week due to a combination of global and domestic factors. The hike in H-1B visa fees, continued US tariffs on Indian goods, and persistent foreign fund outflows have weighed on investor sentiment, especially concerning India’s IT services sector.
“The dollar/rupee is testing key levels, with resistance at 89.00–89.20 and support at 88.40. The up move seems driven more by tariffs and visa fee hikes than broad dollar strength. A close below 88.20 could signal a potential trend reversal, while progress on trade talks or a softer dollar index may support a rupee rebound,” said Amit Pabari, MD of CR Forex Advisors.
The dollar index, which measures the greenback against a basket of six major currencies, was down 0.13% at 97.75 an ounce.
Brent crude oil futures traded 0.36% lower at $69.06 an ounce per barrel.
Traders also highlighted quarter-end activity from importers and exporters. While exporters’ dollar sales lent some support to the rupee, importers’ hedging limited the gains.
The currency has declined over 3% this quarter, marking its biggest fall since April 2022.
Economic headwinds are expected to persist, analysts say. Goldman Sachs noted, “The underperformance of rupee reflects negative implications from the new US H1B visa proposals and continued foreign equity outflows.”
On the monetary policy front, Citi joined other major firms in anticipating a potential rate cut by the Reserve Bank of India on October 1, following the Federal Reserve’s recent move.
Dollar-rupee forward premiums remained steady, with the one-year implied yield at 2.36%.
-With agencies inputs
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