Key Headlines
The Indian rupee spot against the US dollar end lower consecutive 4th day on Monday, as concern over tariffs as we approaching deadline added by gain in dollar index and month end dollar demand from OMC pressure rupee despite inflows expectations.
The rupee at NSE Future 26 Sep-25. ended lower by 5 paise at 87.71 against previous close of 87.66 and after make low of 87.48 and high of 87.76.
An additional 25% tariff is set to be enforced on August 27. This move likely to reduce Indian exports, widen the trade deficit, and add further stress to the rupee. Indian goods face additional U.S. tariffs of up to 50% with effect from Wednesday. Washington had already levied 25% tariffs on Indian goods- steeper than those faced by many other large trade partners- and the latest slated increase comes in response to India's continued purchases of Russian crude.
Credit-rating firm Fitch maintained India's sovereign rating at 'BBB-' on Monday, citing levels of fiscal deficits and debt that are still high, crushing the government's hopes for a lift in ratings by all three major providers. This month, S&P upgraded India to 'BBB', its first such upgrade in 18 years, prompting the government to respond that it expected other rating houses to follow suit. Fitch has rated India at 'BBB-' since 2006, while Moody's has retained its 'Baa3' rating since June 2020. India's government debt burden is "elevated" at its estimate of 80.9%, "well above the 59.6% 'BBB' median", Fitch said, and forecast a slight rise in debt to 81.5% in fiscal 2026.
India's central bank remains focused on price stability while supporting economic growth, Governor Sanjay Malhotra said on Monday, adding that financial and price stability are enablers rather than obstacles to economic expansion. "We have not lost sight of our growth objective," Malhotra said in his speech at an annual banking conference in Mumbai, adding that the cenbank will "continue to provide ample liquidity to the banking sector and doing whatever else is required to support the economy".
The dollar advanced against major currencies on Monday, bouncing from a steep fall last week that followed remarks from Federal Reserve Chair Jerome Powell that boosted expectations for a rate cut next month.
The dollar index , which measures the greenback against a basket of currencies, rose 0.49% to 98.32, and was on track for its biggest daily percentage gain since July 30, with the euro down 0.69% at $1.1634, after hitting a four-week high of $1.174225 on Friday. Germany's 10-year bond yield, the benchmark for the euro zone, rose 3.9 basis points to 2.758%, nearing a five-month peak of 2.787% hit last week.
Measured against a basket of six major currencies , the dollar has weakened by more than 9% this year. The euro has been the lead gainer in the basket with a climb of more than 12%.
Upcoming data points which could influence the central bank's policy path include the Fed's preferred inflation gauge, the PCE price index, on Friday, and monthly payrolls figures for August, due a week later.
Markets are now pricing an 84% chance the Fed will ease rates by a quarter-point next month from 95% last week before PPI numbers, according to CME's FedWatch, with just under 60 basis points worth of cuts expected by December, implying two 25 basis point cuts and a 40% chance of a third. Markets are pricing in a cumulative 14 basis point decline in ECB rates by the end of 2026, with hikes expected in late 2026 and 2027, compared to expectations of 130 basis points in Fed rate cuts in the same time frame.
| Currency | LTP | S1 | S2 | R1 | R2 | Trend |
|---|---|---|---|---|---|---|
| USDINR | 87.71 | 87.0 | 86.30 | 88.10 | 88.80 | BULLISH |
| FUTURE | ||||||
| EURINR | 102.69 | 101.80 | 101.30 | 103.0 | 103.70 | BULLISH |
| FUTURE | ||||||
| GBPINR | 118.51 | 117.75 | 117.0 | 118.60 | 119.50 | SIDEWAYS |
| FUTURE | ||||||
| JPYINR | 61.70 | 61.0 | 60.40 | 62.50 | 63.10 | SIDEWAYS |
| FUTURE | ||||||
Vibhu Ratandhara
Digitally signed by Vibhu Ratandhara Date: 2025.08.26
Disclosure:M/s. Bonanza Portfolio Ltd here by declares that views expressed in this report accurately reflect view point with subject to companies/securities. M/s. Bonanza Portfolio Ltd has taken reasonable care to achieve and maintain independence and objectivity in making any recommendations. The Analysts engaged in preparation of this Report or his/her relative: - (a) do not have any financial interests in the subject company mentioned in this Report; (b) do not own 1% or more of the equity securities of the subject company mentioned in the report as of the last day of the month preceding the publication of the research report; (c) do not have any material conflict of interest at the time of publication of the Report. The Analysts engaged in preparation of this Report:- (a) have not received any compensation from the subject company in the past twelve months; (b) have not managed or co-managed public offering of securities for the subject company in the past twelve months; (c)have not received any compensation for investment banking or merchant banking or brokerage services from the subject company in the past twelve months; (d) have not received any compensation for products or services other than investment banking or merchant banking or brokerage services from the subject company in the past twelve months; (e) has not received any compensation or other benefits from the subject company or third party in connection with the Report; (f) has not served as an officer, director or employee of the subject company; (g) is not engaged in market making activity for the subject company.
M/s. Bonanza Portfolio Ltd operates under the regulation of SEBI Regn No. INH100001666 and research analyst engaged in preparation of report
Disclaimer:This research report has been published by M/s. Bonanza portfolio Ltd and is meant solely for use by the recipient and is not for circulation. This document is for information purposes only and information / opinions / views are not meant to serve as a professional investment guide for the readers. Reasonable care has been taken to ensure that information given at the time believed to be fair and correct and opinions based thereupon are reasonable, due to the nature of research it cannot be warranted or represented that it is accurate or complete and it should not be relied upon as such. If this report is inadvertently send or has reached to any individual, same may be ignored and brought to the attention of the sender. Preparation of this research report does not constitute a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual clients. Past performance is not a guide for future performance. This Report has been prepared on the basis of publicly available information, internally developed data and other sources believed by Bonanza portfolio Ltd to be reliable. This report should not be taken as the only base for any market transaction; however this data is representation of one of the support document among other market risk criterion. The market participant can have an idea of risk involved to use this information as the only source for any market related activity. The distribution of this report in definite jurisdictions may be restricted by law, and persons in whose custody this report comes, should observe, any such restrictions. The revelation of interest statements integrated in this analysis are provided exclusively to improve & enhance the transparency and should not be treated as endorsement of the views expressed in the analysis. The price and value of the investments referred to in this report and the income from them may go down as well as up. Bonanza portfolio Ltd or its directors, employees, affiliates or representatives do not assume any responsibility for, or warrant the accuracy, completeness, adequacy and reliability of such information / opinions / views. While due care has been taken to ensure that the disclosures and opinions given are fair and reasonable, none of the directors, employees, affiliates or representatives of M/s. Bonanza portfolio Ltd shall be liable. Research report may differ between M/s. Bonanza portfolio Ltd RAs and other companies on account of differences in, personal judgment and difference in time horizons for which recommendations are made. Research entity has not been engaged in market making activity for the subject company. Research analyst has not served as an officer, director or employee of the subject company. Research analyst have not received any compensation/benefits from the Subject Company or third party in connection with the research report
