Rupee Ends Higher Amid Foreign Banks’ Dollar Sales and Position Adjustments

The Indian rupee closed at 86.9975 per US dollar, gaining 0.2% on Thursday as foreign banks offloaded dollars and traders trimmed short positions.

March 15, 2025: Rupee Gains Amid Dollar Sales and Trading Adjustments

The Indian rupee strengthened against the US dollar on Thursday, closing at 86.9975, up 0.2% from the previous session. The currency, however, ended the week down 0.1% amid lingering concerns over US President Donald Trump’s trade policies and a temporary outage in the London Stock Exchange Group’s (LSEG) forex trading platform.

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Key Factors Driving Rupee’s Movement

📌 Foreign Banks’ Dollar Sales

• Dollar sales by foreign banks provided much-needed support to the rupee.
• Importers remained active but were unable to halt the currency’s appreciation.

📌 Positional Adjustments by Traders

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• Traders trimmed short bets against the rupee, contributing to its upward movement.

📌 Dollar Weakness & US Bond Yields

• The US Dollar Index (DXY) remained steady at 103.6, supported by a slight uptick in US bond yields.
• The softer-than-expected US inflation data increased the likelihood of Federal Reserve rate cuts, further pressuring the dollar.

📌 Technical Outlook for INR/USD

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• If the dollar continues to weaken, the rupee could appreciate toward 86.50 in the near term.
• However, strong demand from importers is expected below the 87 level, potentially capping further gains.

Impact of LSEG Outage on Forex Trading

• The temporary outage on LSEG’s forex trading platform affected trading volumes.
• Market operations normalized after the issue was resolved, restoring liquidity.

Bond Market and Forward Premiums

• Dollar-rupee forward premiums fell, with the 1-year implied yield down by 3 bps to 2.13%.
• The decline was attributed to rising near-term US Treasury yields.

What’s Next?

📊 Key Data to Watch

• US wholesale inflation data release later today could impact forex markets.
• Indian financial markets will remain closed on Friday due to a local holiday.

💡 Market Outlook

• The rupee’s movement will largely depend on global risk sentiment, US inflation trends, and Fed rate cut expectations.
• The dollar is expected to stabilize in the near term, with some upside risks in the coming weeks.

Will the rupee continue its upward trajectory, or will importer demand and global uncertainties limit gains? The next trading session will provide further clarity.

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#Rupee, #Forex, #USDollar, #INRUSD, #GlobalMarkets, #CurrencyExchange, #DollarIndex, #FederalReserve, #ForexTrading, #FinancialMarkets,