The Indian rupee is set to come under renewed stress on Monday after the US economy added slightly more number of jobs than was expected, prompting a rise in US Treasury yields and bringing relief to the dollar.
The 1-month non-deliverable forward indicated a open in the 85.74-85.78 range, versus the close of 85.6250 in the previous session.
The Indian currency had found respite on Friday after the Reserve Bank of India delivered a larger-than-expected rate cut while the signalling limited room for more reductions. The policy surprise lifted domestic equities and lent support to the rupee.
“The opening today is probably just a retracement of Friday’s move,” a currency trader at a Mumbai-based bank said. “With the US jobs data broadly positive for the dollar, the rupee is simply coming back under pressure.”
The trader is betting on a 85.60-86.00 range for the week with bias more-or-less neutral.
US jobs surprise
Employers added 139,000 jobs last month, above estimates for an increase of 130,000. Average hourly earnings increased 0.4 per cent in May against a rise of 0.3 per cent. The unemployment rate was unchanged at 4.2 per cent.
Federal Reserve rate cut expectations were scaled back post the data, Morgan Stanley said in its daily commentary. The market-implied rate for the December Fed meeting was re-priced 9 basis points higher, implying just 42 bps of rate cuts through 2025, it said, adding that the probability of a rate cut in July fell to 12 per cent from 25 per cent.
The 10-year US Treasury yield climbed nearly twelve bps on Friday and the dollar index rose 0.5 per cent.
The key US jobs report followed a string of mostly weak data points that had raised concerns about the economic outlook.
With that risk now tempered to an extent, attention turns to the pivotal US-China trade talks scheduled to take place in London later in the day.
Key indicators
- One-month non-deliverable rupee forward at 85.84; onshore one-month forward premium at 8.75 paise
- Dollar index at 98.99 ** Brent crude futures down 0.1 per cent at $66.4 per barrel
- Ten-year U.S. note yield at 4.49 per cent
- As per NSDL data, foreign investors bought a net $5.8 million worth of Indian shares on Jun. 5
- NSDL data shows foreign investors sold a net $9.3 million worth of Indian bonds on Jun. 5
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Published on June 9, 2025
