This was also the fourth weekly gain in the last five weeks.

The rupee climbed to 94.21 early in the session as long dollar positions were unwound, but surrendered gains later as the dollar strengthened and index-rebalancing outflows hit the currency. It ended little changed at 94.32 per dollar.

For the week, the rupee rose 0.83 percent, marking its best performance since week ended April 3.

“The recent RBI measures together with favorable oil prices on account of de-escalation of Middle East concerns kept the local unit in positive territory even after sizeable dollar strength today,” said Dhaval Shah, founder and managing director, De-Risk Forex Consultancy.

“This suggests the bias for rupee has changed and we continue with our previous forecast of 93.50.”

The rupee has been on a rising trend after the Reserve Bank of India announced dollar-attracting measures two weeks ago.

“RBI absorbing hedging cost to attract foreign currency deposits and support external borrowing with the concessional FX facility appear most effective in the near term to lend support to the rupee,” said Clifford Lau, hard- and local-currency portfolio manager on the emerging markets debt team at William Blair Investment Management. Robust foreign inflows into Indian government securities and a slump in oil prices since then have also worked in favour of the local currency, but the one-way move was challenged by a resurgent dollar, an uptick in oil and renewed US rate-hike expectations on Friday.

The Fed’s latest policy meeting, the first under new Chair Kevin Warsh, revived expectations of further rate increases and drove the dollar index to a one-year high.

Brent crude inched up after US Vice President JD Vance withdrew from a planned meeting with Iranian negotiators on Friday to begin discussions on implementing the 14-point agreement.

Sterling was last up 0.25 percent on the dollar at USD1.3238, bouncing off a near-three month low hit in Asia trade. Sterling also firmed against the euro, with the common currency down 0.2 percent at 86.61 pence, moving off an overnight one-month high.

“We’re seeing a tactical bounce, a Burnham victory has removed some of the uncertainty — if he hadn’t won it’s hard to say what would have happened — and retail sales data is also helping,” said Nick Rees, head of FX strategy at Monex Europe.

Burnham won a decisive victory for Britain’s ruling Labour Party in an election for a parliamentary seat in northwest England. He has signalled that he will use his victory to enter any contest to replace Starmer, though the Prime Minister has vowed to fight any challenge.

Friday’s data showed retail sales volumes rose 1.2 percent in May, well above economists’ forecasts for a 0.5 percent increase, though investors also had to process separate data showing British government borrowing jumped more sharply than expected.

But away from Friday’s news, the pound has been struggling, against both the euro and the dollar. It has fallen 1.2 percent on the greenback this week.

The Bank of England left interest rates steady on Thursday and while two of its nine rate-setters voted to tighten policy, most others appeared some way from voting for a hike.

Softer than expected inflation data has also led markets to reduce bets on the amount of BoE rate hikes they expect this year. They are only pricing one 25 basis point rate increase by year-end.

In contrast the European Central Bank raised interest rates last week, and the Federal Reserve on Wednesday held rates steady but policymakers’ new quarterly projections showed nine of 19 of them now anticipate a rate hike this year

The loonie was trading 0.3 percent lower at 1.4180 per US dollar, or 70.52 US cents, heading for its seventh straight daily decline. The currency touched its weakest intraday level since April last year at 1.4183. For the week, it was down 1.3 percent as the US Federal Reserve’s hawkish message led to broad-based gains for the US dollar.

Canada’s retail sales grew by 0.5 percent in April from March but core sales, which exclude gasoline stations, fuel vendors, and motor vehicle and parts dealers, were down for a second straight month, falling 0.7 percent. A preliminary estimate showed sales up 1 percent in May.

“April’s report suggests that inflation continued to support nominal retail sales, while underlying demand remained subdued,” Maria Solovieva, an economist at TD Economics, said in a note.

“With higher energy prices weighing on purchasing power through much of the quarter, we expect consumer spending growth to moderate to a +0.5 percent q/q (quarter-over-quarter) annualized pace in Q2, following the more robust +1.5 percent recorded in Q1,” Solovieva said.

The MSCI EM Asia gauge shed early gains to fall nearly 1 percent in afternoon trading, retreating from a record peak as South Korea’s KOSPI index reversed course to drop as much as 2 percent.

The reversal follows a 17 percent surge in the KOSPI over the past six sessions, fuelled by a rush into chipmakers. Market holidays in the US and Taiwan and signs of an early snag in US-Iran ceasefire talks lifted oil prices and dampened risk appetite.

Israeli strikes in southern Lebanon and US Vice President JD Vance’s cancellation of talks with Iranian negotiators raised fresh concerns about peace prospects, prompting investors to pare equity exposure.

Indonesia’s benchmark Jakarta Composite Index drifted in a tight range around its prior close, last down 0.7 percent, while the rupiah dipped as much as 17,850 per dollar before recouping to around 17,820 by noon.

A warning from MSCI on limited visibility in shareholdings and coordinated trading behaviour, along with a downgrade of Indonesia’s information flow criterion to negative, has dealt a fresh blow to already battered capital markets.

Foreign investors have pulled around USD3.65 billion in 2026 from Indonesian equities. A follow-up major test will be a market classification review next week, where a downgrade to frontier status could trigger another bout of outflows.

Nevertheless, market participants broadly expect Southeast Asia’s top economy to retain its emerging markets status.

“The probability (of a downgrade) is low because stocks within MSCI Indonesia that had free float issues have already been exposed and the said stocks have been excluded already,” said Jayden Vantarakis, head of ASEAN equity research at Macquarie Capital.

Josua Pardede, chief economist at PermataBank, said a downgrade next week was not certain. “The weak points remain concentrated in information flow and foreign exchange market liberalization, rather than a broad collapse across the whole accessibility framework”.

Separately, MSCI also flagged persistent concerns over investability in Turkey and lowered its information flow criterion to “negative”, citing limited transparency in shareholding structures.

South Korea’s benchmark KOSPI index fell as much as 2.1 percent after advancing 3.6 percent to record highs earlier in the day. Singapore stocks edged 0.6 percent lower, retreating from an all-time high in the previous session.

Equities in the Philippines also pared early gains to trade largely flat, while the peso fell to 60.762 per dollar. The country’s central bank raised key rates for a second consecutive meeting on Thursday.

The dollar climbed as high as 161.8 yen late on Thursday, closing in on July 2024’s 161.96. Any higher would take it to its strongest against the yen since 1986.

It was last at 161.3 on Friday, steady on the day, but traders were still braced in case Japanese authorities stepped into markets directly to prop up the currency as they did in late April and early May. The dollar has surged this week, rising 1 percent against a basket of other major currencies, to a 13-month top, partly thanks to Wednesday’s Federal Reserve meeting in which policymakers’ new quarterly projections showed nine of 19 of them now anticipate a rate hike by year end.

“In the near term, the dollar may enjoy post-Fed enthusiasm for a bit longer, with markets probably keen to fully price two hikes by December at the first strong data print,” said Francesco Pesole, currency strategist at ING.

He added in a note that the holiday in the US meant there was “a lower-liquidity backdrop, a window during which Japanese authorities have previously shown a preference to intervene”.

“(Dollar/yen) is already deep into intervention territory … A lack of intervention today would leave scope for speculators to push towards 162-163 given the supportive (dollar) environment.”

Weighing on the yen are Japanese interest rates, which are much lower than those elsewhere, even after the Bank of Japan hiked interest rates to a 31-year high this week. Concerns around the spending plans of Japanese Prime Minister Sanae Takaichi have also undermined investor confidence and prompted speculation that more intervention could follow.

The safe-haven US currency was also supported on Friday by jitters about the US-Iran deal to end their war. Switzerland said US talks with Iranian negotiators would not take place on Friday.

More optimism came from news Israel and Hezbollah agreed to a ceasefire in Lebanon, according to a US official. An escalation in fighting in Lebanon had threatened the interim US-Iran deal.

The dollar gained on European peers earlier in the day, but that began to fade by mid-morning in Europe.

The euro hit a three-month low of USD1.1418 before rebounding to trade a whisker firmer at USD1.1464.

The pound hit an over two-month low of USD1.3164 but was last at USD1.322, 0.1 percent higher on the day. Sterling traders had much to digest with Friday data showing stronger than expected retail sales for May, separate figures showing a larger than expected budget deficit, and Labour mayor Andy Burnham decisively winning a parliamentary seat in northern England which could clear a path to ousting British Prime Minister Keir Starmer.

A hawkish swerve from the Federal Reserve has seen markets price in 38 basis points of tightening this year and shrunk the Antipodeans’ yield premium over Treasuries.

That left the Aussie flat at USD0.7007, having lost 0.4 percent for the week so far. Resistance looks tough around USD0.7088, while a break of USD0.6979 would risk a retreat toward USD0.6834.

The kiwi dollar was stuck at USD0.5751, having shed 1.3 percent for the week to breach chart support at USD0.5770. The next bear target is USD0.5681.

The Reserve Bank of Australia kept its rates on hold at 4.35 percent this week and signalled it had time to wait to judge how its three previous hikes were working on the economy.

Markets now imply only a one-in-four chance of a further rate rise at the next meeting in August and have just 13 basis points of future tightening priced in.

That could change following the release of May consumer price data on June 24 where the headline index is expected to ease slightly, but core inflation could nudge higher.

“Underlying inflation is expected to remain too high and will keep the RBA on alert to monitor if inflation is more persistent than expected,” said Trent Saunders, a senior economist at CBA.

He sees headline CPI running at an annual 4.1 percent and the trimmed mean firming to 3.5 percent, with a risk to the upside.

“There continues to be a lot of uncertainty around the extent to which businesses pass higher costs on,” he added. “The available data suggest that the more severe inflation scenarios considered in the immediate aftermath of the Middle East conflict have so far not materialised.”

Of the major local banks, CBA, NAB and ANZ believe rates have now peaked, while Westpac still looks for at least one more hike.

The dovish outlook has helped Australian bonds outperform US debt, with 3-year yields down at 4.437 percent. That has narrowed the spread over Treasuries to 25 basis points, from a peak around 97 basis points in March.

New Zealand bonds have also outperformed, with 10-year yields down at 4.453 percent and almost dead in line with Treasuries. They had paid as much as 57 basis points more back in March.

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Open Bid       Rs 278.25
Open Offer     Rs 278.45
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Copyright Business Recorder, 2026

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Open Bid       Rs 278.64
Open Offer     Rs 279.54
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Copyright Business Recorder, 2026

This was also the fourth weekly gain in the last five weeks.

The Indian rupee climbed to 94.21 early in the session as long dollar positions were unwound, but surrendered gains later as the dollar strengthened and index-rebalancing outflows hit the currency. It ended little changed at 94.32 per dollar.

For the week, the rupee rose 0.83%, marking its best performance since week ended April 3.

“The recent RBI measures together with favorable oil prices on account of de-escalation of Middle East concerns kept the local unit in positive territory even after sizeable dollar strength today,” said Dhaval Shah, founder and managing director, De-Risk Forex Consultancy.

“This suggests the bias for rupee has changed and we continue with our previous forecast of 93.50.”

The rupee has been on a rising trend after the Reserve Bank of India announced dollar-attracting measures two weeks ago.

“RBI absorbing hedging cost to attract foreign currency deposits and support external borrowing with the concessional FX facility appear most effective in the near term to lend support to the rupee,” said Clifford Lau, hard- and local-currency portfolio manager on the emerging markets debt team at William Blair Investment Management.

Robust foreign inflows into Indian government securities and a slump in oil prices since then have also worked in favour of the local currency, but the one-way move was challenged by a resurgent dollar, an uptick in oil and renewed U.S. rate-hike expectations on Friday.

The Fed’s latest policy meeting, the first under new Chair Kevin Warsh, revived expectations of further rate increases and drove the dollar index to a one-year high.

Brent crude inched up after U.S. Vice President JD Vance withdrew from a planned meeting with Iranian negotiators on Friday to begin discussions on implementing the 14-point agreement.

At 0613 GMT the rand traded at 16.50 ​against the dollar , about 0.3% down ​from its previous close.

The currency came under ⁠pressure as investors reassessed expectations for U.S. ​interest rates, with Fed officials signalling that ​borrowing costs may need to remain elevated for longer to curb inflation.

The greenback strengthened against a basket of ​currencies, rising to a one-year high.

Analysts ​have said that the USD’s advance reflects a sharp ‌repricing ⁠of US rate risk rather than safe-haven demand.

“Upside surprises in payrolls and persistently low layoffs reinforced the view that the US economy ​can tolerate ​tighter policy, ⁠while cheaper Brent crude failed to offset higher short-term US yields. ​For South Africans, this keeps USD ​liquidity ⁠expensive and caps ZAR rallies,” said ETM Analytics in a note.

South Africa’s benchmark 2035 government ⁠bond ​was also weaker in early ​deals, as the yield rose 5 basis points to ​8.32%.

A hawkish swerve from the Federal Reserve has seen markets price in 38 basis points of tightening this year and shrunk the Antipodeans’ yield premium over Treasuries.

That left the Aussie flat at $0.7007, having lost 0.4% for the week so far.

Resistance looks tough around $0.7088, while a break of $0.6979 would risk a retreat toward $0.6834.

The kiwi dollar was stuck at $0.5751, having shed 1.3% for the week to breach chart support at $0.5770. The next bear target is $0.5681.

The Reserve Bank of Australia kept its rates on hold at 4.35% this week and signalled it had time to wait to judge how its three previous hikes were working on the economy.

Markets now imply only a one-in-four chance of a further rate rise at the next meeting in August and have just 13 basis points of future tightening priced in.

That could change following the release of May consumer price data on June 24 where the headline index is expected to ease slightly, but core inflation could nudge higher.

“Underlying inflation is expected to remain too high and will keep the RBA on alert to monitor if inflation is more persistent than expected,” said Trent Saunders, a senior economist at CBA. He sees headline CPI running at an annual 4.1% and the trimmed mean firming to 3.5%, with a risk to the upside.

“There continues to be a lot of uncertainty around the extent to which businesses pass higher costs on,” he added.

“The available data suggest that the more severe inflation scenarios considered in the immediate aftermath of the Middle East conflict have so far not materialised.”

Of the major local banks, CBA, NAB and ANZ believe rates have now peaked, while Westpac still looks for at least one more hike.

The dovish outlook has helped Australian bonds outperform US debt, with 3-year yields down at 4.437%.

That has narrowed the spread over Treasuries to 25 basis points, from a peak around 97 basis points in March. New Zealand bonds have also outperformed, with 10-year yields down at 4.453% and almost dead in line with Treasuries.

They had paid as much as 57 basis points more back in March.

At 0153 GMT, the baht was 0.17% lower at 32.80 versus the dollar, after trading in a range of 32.760 to 32.845.

It ended the previous session at 32.74 per dollar, as per LSEG data.

With the Juneteenth trading break looming in the United States, thin liquidity conditions could open the door for Japan to step into markets again, as it did during its ​own holidays in late April and early May, when it intervened to the tune of 11.7 trillion yen ($72.54 billion).

Japanese ​Finance Minister Satsuki Katayama reiterated that authorities stand ready to act decisively against speculative moves, saying a ⁠recent G7 meeting reaffirmed that capacity.

Japanese officials have frequently cited a joint statement signed with Washington last September that allowed for ​intervention to combat excessive market volatility.

The yen changed hands at 161.25 per dollar in early trading in Tokyo after hitting 161.81 overnight, ​its weakest since July 2024, wiping out all gains from the previous intervention bout following a hawkish tilt by the US Federal Reserve.

A break above the currency pair’s 2024 high of 161.96 would send the yen to its weakest level since 1986.

The yen has remained under downward pressure despite the ​Bank of Japan’s latest rate hike this week, as the move has done little to shift the fundamental drivers in foreign exchange markets. ​

Japanese rates are still far below US levels, keeping the yield gap wide, supporting the dollar and fuelling carry trades where investors borrow cheaply ‌in yen ⁠to chase higher returns elsewhere.

Markets expect the BOJ to raise rates again by the end of this year. But that has failed to dispel pessimism in the yen, with speculative net short positions in the currency sitting at the highest level since July 2024, data showed on Friday.

Speaking in Japan’s parliament on Friday, BOJ Deputy Governor Ryozo Himino stressed that monetary policy does not target exchange ​rates, but cautioned that currency ​volatility is exerting a larger ⁠impact than before.

“As such, we need to be mindful of the chance currency moves could affect inflation expectations and underlying inflation,” Himino said. “We will scrutinize how market moves could affect Japan’s economy and ​prices.”

The yen’s downtrend has been exacerbated by the war in Iran, which has driven oil prices ​and inflation sharply ⁠higher, hitting energy importers like Japan hardest.

The BOJ is no longer alone in tightening, with the European Central Bank joining the cycle, while the Federal Reserve’s meeting this week has cemented expectations that its next move will also be a rate hike.

“Clearly against the backdrop ⁠of a ​more hawkish Fed, the yen is vulnerable,” said Chris Scicluna, the head of ​economic research at Daiwa Capital Markets in London.

“The yen is going to be under additional pressure to depreciate, in which case then I think the authorities are ​going to have to step in and intervene once again to support that currency.”

Bank Indonesia (BI) raised key interest rates to 5.75 percent, as expected, just a week after an off-cycle increase as policymakers continue their efforts to support the rupiah.

The rupiah is down about 6 percent this year, having pared some losses since last week’s surprise rate hike. Regardless, it remains one of the worst performing units in emerging Asia.

In the Philippines, the peso rose briefly to 60.40 before giving up gains and trading at 60.580 per US dollar.

Most emerging Asian equities rose, led by a 2.3 percent jump in South Korea’s benchmark to its first close above 9,000. This, along with record highs in Taiwan and Singapore, helped lift MSCI’s EM Asia index to a two-week peak.

Currencies, however, were pressured by a strong dollar, which hit a two-month high overnight, after the Fed held its benchmark rate but half of the policymakers projected a rate hike this year.

The Malaysian ringgit fell as much as 0.9 percent to 4.102 per dollar.

The US central bank on Wednesday held rates steady in a 3.50 percent to 3.75 percent range as Kevin Warsh began his era in charge with a sweeping policy review.

Updated interest rate projections showed nearly half of policymakers now expect a hike this year as inflation concerns mount, although the new Fed chair did not provide his view.

The Fed funds futures market is pricing in 69 percent odds of a rate hike by September, LSEG data showed.

A stronger US economic growth outlook is adding to rate hike expectations, with the last three payrolls reports showing much higher monthly jobs gains than economists had predicted. Data on Thursday showed the number of Americans filing claims for unemployment benefits fell last week as layoffs remained low. “We’ve seen very spectacular data in the US that’s been surprising to the upside since late April, then the Fed was as hawkish as market expectations could ever have been, so we’ve seen more dollar upside,” said Sarah Ying, head of FX strategy at CIBC Capital Markets.

“There’s room for the greenback to strengthen further.”

The euro was last down 0.17 percent at USD1.1479, while sterling fell 0.35 percent to USD1.3245, with both reaching their lowest levels in more than two months.

The dollar index, which measures the greenback against a basket of currencies including the yen, euro and sterling, rose 0.24 percent to 100.59, and reached 100.8, the highest since May 2025. It surged 0.85 percent the previous session, its biggest single-day jump in over three months.

“The Fed’s hawkish policy update is threatening to trigger a bullish break out for the US dollar,” said Lee Hardman, senior currency analyst at MUFG.

“The US dollar has derived support from the sharp adjustment higher for short-term US rates … more than offsetting the dampening impact from the US-Iran deal announcement over the weekend,” he said. Oil prices eased on Thursday after the US and Iran signed an interim agreement that would end the Iran war, reopen the Strait of Hormuz and waive US sanctions on Iranian oil, sapping some strength from the safe-haven greenback.

Yet the fall did little to stop the dollar rising.

“Markets are examining whether the Strait of Hormuz can be reopened for free passage,” said Kimmy Tong, global market and FX strategist at Everbright Securities International.

“Until that is confirmed, sentiment favouring a stronger dollar should continue to dominate,” she said.

The risk-sensitive Australian dollar gained 0.2 percent versus the greenback to USD0.7028.

The Japanese yen weakened to as low as 160.94 per dollar, its lowest since July 2024, wiping out gains made after Tokyo’s intervention on April 30. The renewed slide prompted a fresh government response, with officials reiterating their readiness to support the currency.

======================================================================================
June 18, 2026
======================================================================================
                                Currency units per SDR           SDR per Currency unit
======================================================================================
Currency                        17-Jun-26      16-Jun-26      15-Jun-26      12-Jun-26
======================================================================================
Chinese yuan                       9.2348        9.24138        9.23992         9.2354
Euro                              1.17907        1.17937        1.17808        1.18072
Japanese yen                      219.199         219.12        218.948        218.751
U.K. pound                        1.01898        1.01818        1.01851        1.01845
U.S. dollar                       1.36666        1.36737         1.3674        1.36574
Algerian dinar                    181.633                       181.764        181.761
Australian dollar                 1.93605        1.94008        1.93109        1.94301
Botswana pula                     17.8882        17.9209        17.8745        17.9231
Brazilian real                    6.92008        6.94266        6.89498        6.94083
Brunei dollar                                    1.75406        1.75273        1.75444
Canadian dollar                                  1.91377         1.9119         1.9089
Chilean peso                     1,211.59       1,217.13       1,229.70       1,241.49
Czech koruna                      28.4702        28.4727        28.4515        28.5359
Danish krone                      8.81345        8.81539                       8.82519
Indian rupee                       128.98        129.489        129.462        130.268
Israeli New Shekel                3.98791        3.98176        3.97504        4.00845
Korean won                       2,068.44       2,064.72       2,079.00       2,085.49
Kuwaiti dinar                    0.419497                      0.419724
Malaysian ringgit                                5.55494        5.53523        5.54287
Mauritian rupee                   65.0246        65.0368        64.8908        65.5953
Mexican peso                      23.4918                       23.5204        23.4999
New Zealand dollar                2.34378        2.35064        2.33784        2.34805
Norwegian krone                   12.9792         13.028        13.0244        13.0181
Omani rial                       0.525481       0.525751       0.525765
Peruvian sol                      4.61384        4.61487        4.62592        4.62987
Philippine peso                   82.5246        82.8432        83.8574
Polish zloty                      4.99406        5.00305        5.00305        5.01188
Qatari riyal                      4.97463         4.9772        4.97735
Saudi Arabian riyal               5.12497        5.12763        5.12776
Singapore dollar                  1.75165        1.75406        1.75273        1.75444
Swedish krona                     12.8412        12.8516                        12.903
Swiss franc                        1.0828        1.08596        1.08394        1.08727
Thai baht                         44.4753          44.52        44.5458        44.7922
Trinidadian dollar                                              9.23762        9.23259
U.A.E. dirham
Uruguayan peso                                                  55.1377        55.1119
======================================================================================

NOTES

(1) The value of the U.S. dollar in terms of the SDR is the recip rocal of the sum of the dollar values, based on market exchange rates, of specified quant ities of the first four currencies shown. See SDR Valuation.

The value in terms of the SDR of each of the other currencies shown above is derived from that currency’s representative exchange rate against the U.S. dollar as reported by the issuing central bank and the SDR value of the U.S. dollar, except for the Iranian rial and the Libyan dinar, the values of which are officially expressed directly in terms of domestic currency units per SDR. All figures are rounded to six significant digits. See Representative Exchange Rates for Selected Currencies.

(2) The value in terms of each national currency of the SDR is the reciprocal of the value in terms of the SDR of each national currency, rounded to six significant digits.

Copyright Business Recorder, 2026

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Open Bid       Rs 278.26
Open Offer     Rs 278.46
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Open Bid       Rs 278.55
Open Offer     Rs 279.55
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Copyright Business Recorder, 2026

The Reserve Bank of India’s short-dollar forward book is estimated to have ballooned to an all-time high of nearly $110 billion, according to two officials at foreign banks, up from $96 billion in April.

The surge follows persistent central bank intervention across both domestic forwards and non-deliverable forward markets to support the rupee.

The forward book is poised to expand further, with banks passing on the currency risk from foreign-currency inflows raised by them to the RBI via swaps. State-run enterprises and lenders are expected to add to this buildup through dollar-rupee swaps with the central bank to hedge their external commercial borrowings.

Both steps were part of a package announced to stabilise the rupee. Analysts say they unlikely to push the rupee much higher beyond its recent recovery against the dollar.

“We do not expect a significant appreciation in the INR,” on the back of these inflows, analysts at Goldman Sachs said in a note. The flows “are likely to be absorbed by the RBI.. through rebuilding of its FX buffers, including unwinding a significantly large short dollar forward book.”

Backed by RBI efforts to boost inflows and oil prices sliding to three-month lows, the rupee has recovered to 94.50 per dollar after sliding to a all-time low  of near 97 last month.

From a peak of $728.5 billion in March, India’s FX reserves have fallen to $681.6 billion.

The RBI’s drive to rebuild its FX reserves alongside the sizeable overhang of its forward book are expected to be a drag on the rupee and keep its upside limited, according to Sakshi Gupta, principal economist at HDFC Bank.

Shrinking the RBI’s forward book will require the central bank to either buy dollars in the forward market or let its outstanding contracts mature. Letting positions mature is equivalent to an outright dollar purchase.

The dollar inflows could be used to run down forward book maturities of up to one year, which stood at $44.6 billion as of April 2026, Gupta said.

Interest payments

The hedging of interest obligations on foreign currency deposits is expected to further cap the rupee’s upside.

Assuming deposit inflows of around $50 billion, broadly consistent with estimates from bankers, and applying a 6% annual interest rate over an average maturity of four years, banks would need to hedge nearly $12 billion via forward dollar purchases, with implications for both spot and forward premiums.

The associated hedging demand is expected to steepen the forward curve with banks seeking to hedge longer-term interest payments, while the shorter tenure remains relatively anchored amid ample liquidity, said Sameer Karyatt, executive director and head of trading at DBS Bank India.

The U.S. central bank on Wednesday held rates steady in a 3.50% to 3.75% range as Kevin Warsh began his era in charge with a sweeping policy review.

Updated interest rate projections showed nearly half of policymakers now expect a hike this year as inflation concerns mount, although the new Fed chair did not provide his view.

The Fed funds futures market is pricing in 69% odds of a rate hike by September, LSEG data showed.

A stronger U.S. economic growth outlook is adding to rate hike expectations, with the last three payrolls reports showing much higher monthly jobs gains than economists had predicted.

Data on Thursday showed the number of Americans filing claims for unemployment benefits fell last week as layoffs remained low.

“We’ve seen very spectacular data in the U.S. that’s been surprising to the upside since late April, then the Fed was as hawkish as market expectations could ever have been, so we’ve seen more dollar upside,” said Sarah Ying, head of FX strategy at CIBC Capital Markets.

“There’s room for the greenback to strengthen further.”

The euro was last down 0.17% at $1.1479, while sterling fell 0.35% to $1.3245, with both reaching their lowest levels in more than two months.

The dollar index, which measures the greenback against a basket of currencies including the yen, euro and sterling, rose 0.24% to 100.59, and reached 100.8, the highest since May 2025. It surged 0.85% the previous session, its biggest single-day jump in over three months.

“The Fed’s hawkish policy update is threatening to trigger a bullish break out for the U.S. dollar,” said Lee Hardman, senior currency analyst at MUFG.

“The U.S. dollar has derived support from the sharp adjustment higher for short-term U.S. rates … more than offsetting the dampening impact from the U.S.-Iran deal announcement over the weekend,” he said.

Oil prices eased on Thursday after the U.S. and Iran signed an interim agreement that would end the Iran war, reopen the Strait of Hormuz and waive U.S. sanctions on Iranian oil, sapping some strength from the safe-haven greenback.

Yet the fall did little to stop the dollar rising.

“Markets are examining whether the Strait of Hormuz can be reopened for free passage,” said Kimmy Tong, global market and FX strategist at Everbright Securities International.

“Until that is confirmed, sentiment favouring a stronger dollar should continue to dominate,” she said.

The risk-sensitive Australian dollar gained 0.2% versus the greenback to $0.7028.

The Japanese yen weakened to as low as 160.94 per dollar, its lowest since July 2024, wiping out gains made after Tokyo’s intervention on April 30.

The renewed slide prompted a fresh government response, with officials reiterating their readiness to support the currency.

“We are ready to respond appropriately to currency moves as needed at any time,” Chief Cabinet Secretary Minoru Kihara told a press conference when asked about the yen’s decline.

Elsewhere, the Bank of England kept interest rates unchanged at 3.75% on Thursday.

The rupee ended at 94.3325, up 0.2% from its previous close. The currency has gained about 1.5% in the last five sessions.

The rupee had opened weaker, after a hawkish shift in the Federal Reserve’s latest policy projections, and immediately hit day’s low of 94.7025 to the U.S. dollar.

However, it soon changed its direction, climbing all the way to 94.19, its highest level in six weeks.

Anil Bhansali, head of treasury at Finrex Treasury Advisors, attributed the change in direction to fixing-related selling in the USD/INR pair.

“There was selling across foreign banks and private banks, which have seen strong FCNR-B flows, while aggressive selling from exporters supported the rupee, despite a higher dollar index.”

The central bank was active in small pockets through the day to absorb the dollar inflows, he added.

Exporters were the dominant force in the dollar/rupee market, with aggressive dollar sales adding strong downward pressure on the pair, traders said.

The move reflected the unwinding of residual long-dollar positions, they added, as investors anticipated further dollar strength due to the Fed’s hawkish outlook.

The U.S. central bank’s updated projections showed a notable hardening in rate expectations, with policymakers pencilling in at least one rate hike in 2026. Markets have also fully priced in a 25-basis-point hike before the end of December.

Declining crude oil prices provided an additional tailwind for the rupee. Brent crude futures dropped 2.5% in Asian trade, extending losses after the U.S. and Iran signed an interim peace agreement on Wednesday.

Lower oil prices typically support the rupee by easing India’s import bill and reducing dollar demand from oil companies.

At 0614 GMT the rand ​traded at 16.3175 against the dollar , about 0.4% ​higher than its previous close.

The 14-point U.S.-Iran agreement extends ⁠a ceasefire announced in April by another 60 ​days, including in Lebanon, to allow the two ​sides to negotiate a final truce.

Oil prices fell more than $1 per barrel on Thursday after the signing of the interim agreement that ​would end the Iran war, reopen the Strait ​of Hormuz and waive US sanctions on Tehran’s oil, boosting ‌the ⁠oil supply outlook.

“Looking ahead, given expectations that the Strait of Hormuz will reopen following the digital signing of a peace deal this week, the recent acceleration ​in headline inflation ​is expected ⁠to lose momentum, with fuel inflation moderating in July,” ETM Analytics said in ​a research note.

On Wednesday, Statistics South ​Africa released ⁠May inflation  data that showed slower-than-expected price growth, which analysts said reduced the likelihood of another central bank ⁠interest ​rate hike next month.

South Africa’s benchmark ​2035 government bond was flat in early deals, with the yield ​at 8.245%.

The US central bank held rates steady in a 3.50%-3.75% range as new chair Kevin Warsh opened his era with a sweeping policy review. New quarterly projections showed nine out of 19 Fed officials now anticipate a hike in rates by the end of 2026.

The Fed funds futures market has now priced in an 83% chance of Fed tightening in December, according to CME FedWatch, with a strong retail sales reading further adding to hawkish bets.

In reaction to the buoyant dollar, the onshore yuan weakened to a low of 6.7690 per dollar, the weakest level since June 11, before changing hands at 6.7625 as of 0310 GMT.

Its offshore counterpart last fetched 6.7642 per dollar.

Prior to the market opening, the People’s Bank of China (PBOC) set the midpoint rate at 6.8130 per dollar, 378 pips weaker than a Reuters’ estimate of 6.7752. The spot yuan is allowed to trade 2% either side of the fixed midpoint each day.

The central bank has been setting guidance at weaker-than-expected rates since November 2025, a move that investors widely interpret as an attempt to keep the market stable and prevent excess yuan gains.

 The gap between market projections and the official setting considerably narrowed on Thursday amid the dollar strength, traders and analysts said. On Wednesday, the official setting was 527 pips softer than Reuters’ forecast.

“The fix tends to narrow with the estimates when the dollar is moving higher and widen when dollar is falling - a sign that PBOC wants to slow the USD/CNY move lower,” Maybank analysts said in a note.

The weaker yuan was driven by the elevated dollar as well as a surprise drop in China’s retail sales in May, the first drop in more than three years, pointing to weak consumption, according to data released on Tuesday, they said.

“However, direction-wise, PBOC is comfortable with allowing the yuan to strengthen,” they said.

Separately, to promote the offshore yuan business in Shanghai, China’s central bank said on Wednesday that six top state banks had been authorised to conduct offshore yuan transactions in Shanghai’s free trade zone.

“The near-term impact on CNH spot is likely to be limited, given the tiny spread between CNY and CNH,” said Serena Zhou, senior China strategist at Mizuho Securities.

“However, this is a further step toward closer integration of the onshore and offshore yuan markets. Over time, it should give onshore banks a greater role in CNH pricing, while also enhancing the PBOC’s ability to monitor and guide offshore yuan market dynamics.”

The Aussie rose 0.3% to $0.7037 after slumping 0.8% overnight to as low as $0.6995. Near-term support is at $0.6980 while resistance is heavy at $0.7088, followed by $0.7200.

The kiwi dollar gained 0.5% to $0.5793, having dropped 1.1% overnight to dip as far as $0.5754, the lowest level since early April.

A strong first-quarter GDP report added to the case that the economy was recovering before the US-Israeli war on Iran kicked off.

Overnight, the Fed held interest rates steady as expected, but new economic projections showed about half of the Fed officials expect at least one rate hike this year, a sharp turnaround from March when the consensus was still for rate cuts.

New Fed Chair Kevin Warsh refrained from submitting an interest rate path projection.

Still, the unexpected hawkish turn of the board triggered a heavy selloff in stocks and bonds and boosted the US dollar. A rate hike by October is now fully priced in by the futures market.

“We no longer project easing in our forecast horizon (vs 75 bps of rate cuts in 2027), and look for the FOMC to stay on hold going forward,” analysts at TD Securities said in a note to clients.

“USD is set for a near-term rebound as rate differentials and positioning re-align in its favor, with AUD and EM carry particularly exposed.”

Local data showed the New Zealand economy grew 0.8% in the first quarter, picking up from a 0.5% gain the previous quarter.

That lifted the annual pace to 1.5%, well above analyst expectations for a 1.1% gain.

That suggested the economy had eliminated its negative output gap, said Josh Williamson, chief economist at Citi Australia and NZ, adding that a slowdown in the second quarter due to the war’s impact could be a one-off if peace in the Middle East was sustained.

“Which could convince internal MPC members who voted for a hold at the last meeting that the time is right to start normalising the OCR, particularly as the current OCR of 2.25% is so far away from the RBNZ’s estimate for neutral of 3.0% to 3.5%,” said Williamson.

Swaps imply an 80% probability that the RBNZ could start tightening in July given its hawkish outlook, even though oil prices have slumped 15% this month alone.

A total tightening of 60 basis points is priced in for the year.

In contrast, markets already suspect the Reserve Bank of Australia may be done tightening after it held its key rate steady at 4.35% on Tuesday, with the probability of one more rise pared back to 50%.

That helped Aussie government bonds outperform US Treasuries.

Three-year bond yields rose 3 basis points to 4.421%, while the spread over Treasuries has shrunk to 23 basis points from more than 90 basis points a couple of months ago.

The Indian rupee is expected to open ‌in the 94.70–94.75 range on Thursday, traders said, after settling at 94.5250 in the previous session.

Fed policymakers struck a more hawkish tone than expected late Wednesday, with nine of 18 projecting at ​least one rate hike in 2026.

Economists had anticipated far fewer, with ​Goldman Sachs saying it expected around three members to signal a ⁠hike.

Goldman Sachs further flagged the Fed’s inflation outlook, noting the median projection ​for 2027 core PCE inflation (Q4/Q4) was set at 2.5%, above its 2.3% estimate.

The meeting ​raises the risk of interest rate hikes later this year, the bank said in a note. However, their base case for now remains that the Fed will leave the policy rate ​unchanged this year.

“We suspect that most of the (Fed) voters still lean toward an ​unchanged policy rate and that participants treated the news about a deal with Iran and the ‌reopening ⁠of the Strait of Hormuz cautiously for now,” it said.

US two-year yield jumped 12 basis points in response, equities dropped, and the dollar strengthened. The robust US data added to the underlying hawkish tone on rates.

Retail sales jumped 0.9% month-on-month in ​May versus 0.5% ​expected. Pending home ⁠sales rose 3.8% month on month, above all estimates.

The data underscored U.S. economic resilience and came in the wake of ​the third straight month of robust job growth.

“After a long time, ​it’s ⁠not about oil (for the rupee),” a currency trader at a private sector bank said.

“It is difficult to assess how much of this Fed repricing will play out.”

Oil prices continued ⁠to ​trend lower after the U.S. and Iran reached ​an interim agreement to halt the war, reopen the Strait of Hormuz, and resolve what had been ​the largest energy supply disruption in history.

Brent crude futures were down $1.53, or 1.9%, at $78.02 a barrel at 1326 GMT, while U.S. West Texas Intermediate fell $2.22, or 2.9%, to $74.57 a barrel.

Brent sank to its lowest since March 2, which was the first day of trading after the initial U.S.-Israeli strikes on Iran, while WTI was at its lowest since March 4.

“The selloff extended as energy markets continued to aggressively price in a faster-than-expected return of Iranian barrels following the recent U.S.-Iran memorandum of understanding,” IG market analyst Tony Sycamore said in a note.

The 14-point memorandum begins a 60-day negotiation period during which Iran will allow toll-free passage through the Strait of Hormuz, a key oil and gas shipping lane. The deal calls for traffic through the strait to be restored to its full capacity within 30 days.

The preliminary accord defers many of the more difficult issues, such as Iran’s nuclear programme, and also requires the U.S. and its partners to come up with a $300 billion plan to finance Iran’s recovery.

Analysts expect a gradual recovery in flows through the Strait of Hormuz, while industry experts have cautioned that prices may not plummet as demand recovers and inventories are refilled.

Investment bank Goldman Sachs expects Gulf exports to normalise to pre-war levels by end-July, with crude production recovering by October.

The bank estimates that a normalisation in exports to pre-war levels might be achieved with a 13 million barrel-per-day increase in Hormuz flows from current levels to around 70% of pre-war levels.

BNP Paribas does not currently anticipate a return to pre-war prices and views $75 per barrel as a “durable floor for the foreseeable future,” it said in a note, given ongoing supply losses and higher demand. Brent traded around $60 to$70 per barrel in the first two months of the year before the Iran war.

China, the world’s second-largest oil consumer, is forecast to consume 753 million metric tons in 2026, down 4.9% from 2025 amid a pivot to new energy and high oil prices, according to a report published by PetroChina’s research unit.

Ukrainian drones hit the Russian capital’s oil refinery for the second time this week in what Kyiv cast as a demonstration of its growing capabilities.

The US central bank held rates steady in a 3.50%-3.75% range as new chair Kevin Warsh opened the new era with a sweeping policy review. Nearly half of policymakers, however, now expect a ​hike, this year on mounting inflation concerns.

The Fed funds futures market has ​now priced in an 83% chance of Fed tightening in December, according ⁠to CME FedWatch, with a strong retail sales reading further adding to hawkish bets.

Fresh ​Gulf uncertainties continued to sap risk appetite after US President Donald Trump said he ​could resume attacks if Iran violates the ceasefire agreement, keeping oil prices elevated and the dollar supported. Iran’s leaders did not address the new threats.

The euro last traded a shade stronger at $1.1511 and sterling ​strengthened to $1.3318 , after touching the currencies touched two-month lows earlier.

The risk-sensitive Australian dollar ​and the New Zealand dollar were both up roughly 0.2% to $0.7025 and $0.5780, respectively.

The dollar index , which ‌measures ⁠the greenback against a basket of currencies including the yen and the euro, was little changed at 100.31.

It surged 0.85% to the strongest level since March 31 in the previous session, in its biggest single-day gain since March 2,

“The dollar is ​up making some sizable ​gains… this is ⁠going to take a little while to shrug off,” NAB’s senior markets strategist Gavin Friend said in a podcast. “It looks like ​we could be pushing into new territory here for the ​dollar.”

The Japanese ⁠yen weakened to as much as 160.760 after hitting its weakest since 2024 overnight, continuing to hover around the 160 level widely seen as a line in the sand ⁠for ​potential official intervention.

Elsewhere, the Bank of England looks ​on course to keep interest rates unchanged at 3.75% later on Thursday as it assesses what a tentative truce ​in the Iran war means for inflation.

The Fed is widely expected to hold its benchmark rate steady in the range of 3.50 percent to 3.75 percent, though it may drop its easing bias from the policy statement. The US central bank will also issue its Summary of Economic Projections and the closely watched “dot plot,” offering markets a window into how Federal Open Market Committee members view the direction of monetary policy.

All eyes will be on the post-meeting press conference, where any signals Warsh offers on the Fed’s outlook will be critical as inflation remains stubbornly above the central bank’s 2 percent annual target.

Warsh, appointed by President Donald Trump, has suggested he will adopt a different governing approach from his predecessor Jerome Powell, with one notable distinction being his reluctance to commit to holding press conferences after every policy meeting, a practice Powell had instituted, though the Fed confirmed there will be one on Wednesday.

“We’re at a point now where we’ve probably reached maximum interaction between the Fed and the markets,” said Eric Theoret, a foreign exchange strategist at Scotiabank.

Powell remains a voting member of the FOMC as a governor. With inflation likely to dominate the press conference, traders will also be listening for any comments from Warsh on alternative inflation gauges he is known to favor, including the Dallas Fed’s trimmed mean measure, which points to softer price pressures than headline Personal Consumption Expenditures, or PCE.

The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, rose 0.11 percent to 99.66, with the euro down 0.13 percent at USD1.1592.

The Bank of England meets on Thursday and, as with the Fed, no change in policy is expected, leaving the focus on the tone of policymakers’ commentary. That commentary could be shaped in part by Wednesday’s UK inflation data, which showed prices unexpectedly held at 2.8 percent in May, unchanged from the 13-month low reached in April. Markets currently see one BoE rate hike by year-end.

Sterling was last down 0.19 percent at USD1.34.

The yen firmed 0.12 percent to 160.22 per dollar, still keeping traders on alert for potential intervention by Japanese authorities to support the persistently weak currency.

The spot yuan opened at 6.7570 per dollar and was trading at 6.7565 as of 0230 GMT, 10 pips firmer than the previous late session close as it hovered near its lowest level in more than three years.

The yuan is up 3.5 percent this year, moving closer to the 6.7 level last seen in early 2023.

Prior to the market opening, the PBOC set the midpoint rate at 6.8096 per dollar, 527 pips weaker than a Reuters’ estimate. The spot yuan is allowed to trade 2 percent either side of the fixed midpoint each day.

======================================================================================
June 17, 2026
======================================================================================
                                Currency units per SDR           SDR per Currency unit
======================================================================================
Currency                        16-Jun-26      15-Jun-26      12-Jun-26      11-Jun-26
======================================================================================
Chinese yuan                      9.24138        9.23992         9.2354         9.2383
Euro                              1.17937        1.17808        1.18072        1.18156
Japanese yen                       219.12        218.948        218.751        218.843
U.K. pound                        1.01818        1.01851        1.01845         1.0203
U.S. dollar                       1.36737         1.3674        1.36574        1.36317
Algerian dinar                                   181.764        181.761         181.75
Australian dollar                 1.94008        1.93109        1.94301        1.94516
Botswana pula                     17.9209        17.8745        17.9231        18.0313
Brazilian real                    6.94266        6.89498        6.94083        7.01651
Brunei dollar                     1.75406        1.75273        1.75444         1.7548
Canadian dollar                   1.91377         1.9119         1.9089        1.90748
Chilean peso                     1,217.13       1,229.70       1,241.49       1,248.62
Czech koruna                      28.4727        28.4515        28.5359        28.5938
Danish krone                      8.81539                       8.82519        8.83127
Indian rupee                      129.489        129.462        130.268        130.483
Israeli New Shekel                3.98176        3.97504        4.00845        4.04179
Korean won                       2,064.72       2,079.00       2,085.49       2,075.28
Kuwaiti dinar                                   0.419724                      0.418832
Malaysian ringgit                 5.55494        5.53523        5.54287        5.54468
Mauritian rupee                   65.0368        64.8908        65.5953        65.8202
Mexican peso                                     23.5204        23.4999        23.6963
New Zealand dollar                2.35064        2.33784        2.34805        2.34948
Norwegian krone                    13.028        13.0244        13.0181        12.9847
Omani rial                       0.525751       0.525765                      0.524136
Peruvian sol                      4.61487        4.62592        4.62987        4.63476
Philippine peso                   82.8432        83.8574                       83.8307
Polish zloty                      5.00305        5.00305        5.01188         5.0271
Qatari riyal                       4.9772        4.97735                       4.96192
Saudi Arabian riyal               5.12763        5.12776                       5.11187
Singapore dollar                  1.75406        1.75273        1.75444         1.7548
Swedish krona                     12.8516                        12.903        12.9895
Swiss franc                       1.08596        1.08394        1.08727        1.09006
Thai baht                           44.52        44.5458        44.7922        44.8754
Trinidadian dollar                               9.23762        9.23259        9.24223
U.A.E. dirham                                                                  5.00623
Uruguayan peso                                   55.1377        55.1119        55.2654
======================================================================================

NOTES

(1) The value of the U.S. dollar in terms of the SDR is the recip rocal of the sum of the dollar values, based on market exchange rates, of specified quant ities of the first four currencies shown. See SDR Valuation.

The value in terms of the SDR of each of the other currencies shown above is derived from that currency’s representative exchange rate against the U.S. dollar as reported by the issuing central bank and the SDR value of the U.S. dollar, except for the Iranian rial and the Libyan dinar, the values of which are officially expressed directly in terms of domestic currency units per SDR. All figures are rounded to six significant digits. See Representative Exchange Rates for Selected Currencies.

(2) The value in terms of each national currency of the SDR is the reciprocal of the value in terms of the SDR of each national currency, rounded to six significant digits.

Copyright Business Recorder, 2026