The rupee falls as NDF maturities and corporate hedging decline

The Indian rupee fell on Friday under dollar demand pressure linked to maturing non-deliverable forward positions and corporate hedging, as global markets awaited a major US Supreme Court ruling on trade tariffs. The currency closed at 90.1625 against the US dollar, down 0.1% on the day, but little changed from week to week. Weakness in local equities also played a role, with the BSE Sensex and Nifty 50 posting their steepest weekly decline since late September. (link)Traders pointed to increased demand for dollars at the central bank’s daily benchmark rate and companies’ hedging activities weighing on the local unit on Friday.

State-owned banks were occasionally spotted offering dollars near the day’s low for the rupee, which helped limit losses, two traders said. The central bank stepped in decisively to support the currency earlier this week, but traders said the rupee remains vulnerable without progress in US-India trade talks or a turnaround in portfolio outflows.

India’s trade deal with the United States was postponed because Prime Minister Narendra Modi did not call President Donald Trump to finalize a deal they were negotiating, Commerce Secretary Howard Lutnick said Friday.

Foreign investors have already sold nearly $1 billion of local stocks in January so far, adding to last year’s record outflows of nearly $19 billion.

Market participants are also bracing for an impending Supreme Court ruling on President Donald Trump’s use of emergency tariff powers and a major U.S. jobs report later in the day.

A decision against the Trump administration “will likely bring a renewed escalation of trade policy uncertainty, which we argue is negative for the US dollar, although given a ruling against, it would be less surprising that we may not see major market moves,” MUFG said in a note.