Forex News

Societe Generale analysts note the RBI has barred banks from offering INR NDFs to residents and non-residents to curb speculation, but they argue Rupee headwinds remain structural, tied to FPI outflows, Oil shock dynamics and slowing domestic growth, with 10-year yields seen heading toward 7.20–7.25%.

RBI measures seen as band-aid on deeper issues

"The RBI unveiled additional steps to rein in speculative trading against the currency, barring banks from offering INR NDFs to both resident and non-resident clients, a technical band-aid in our view."

"The headwinds for the rupee remain structural and tied to persistent FPI outflows, oil-shock dynamics and slowing domestic growth rather than speculation alone."

"Bonds also resumed their slide with the 10y IGB yield creeping 3bp higher to 7.07%. Local traders are positioning for yields to extend the move toward 7.20–7.25%, reflecting fading FPI appetite."

"The numbers for FY26 underline the shift: FPI demand for FAR‑route government bonds collapsed to just ₹35.46bn ($380m) versus ₹2.31tn ($24.7bn) in FY25, when index inclusion drove heavy front‑loading. March alone saw ₹176.86bn ($1.9bn) of FPI debt outflows as oil‑shock fears revived concerns over fiscal slippage and further narrowed the IGB‑UST spread."

"While the RBI has already moved to curb speculative FX positioning by banks and FIs, markets are increasingly wary that the central bank may pivot to a more hawkish posture as early as next week, with the Middle East conflict forcing a reassessment of policy risks."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

Rabobank’s Senior FX Strategist Jane Foley discusses recent Swiss inflation data and implications for the Swiss Franc. Foley notes that low Swiss CPI reduces pressure on the SNB to cut rates below zero, while credible FX intervention and safe-haven demand should keep CHF firm. They still expect another dip toward the EUR/CHF 0.90 area in coming months.

SNB policy, FX threat and safe haven

"Since Swiss March CPI inflation has edged away from the zero level, there is less pressure on the SNB to consider moving its policy rate below zero."

"The recent spike in market expectations regarding ECB rate hike risks will also be welcome since the widening in short-term interest rates in favour of the EUR should, in theory, offer support to EUR/CHF."

"That said, in our view, is likely that the threat of FX intervention had more leverage in pushing EUR/CHF away from its recent lows last month."

"Despite the reprieve offered by slightly firmer Swiss CPI inflation data and the expectations of ECB rate hikes, we see scope for the CHF to remain firm going forward and see another dip towards the EUR/CHF 0.90 area as likely in the coming months."

"Near-term, we would expect safe-haven and diversification flows to keep the CHF well supported."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

• Initial Jobless Claims decreased to 202K vs. the previous week.
• Continuing Jobless Claims went up to 1.841M.

According to a report from the US Department of Labour (DOL) released on Thursday, the number of US citizens submitting new applications for unemployment insurance decreased to 202K for the week ending March 28. The latest print came in below initial estimates and was lower than the previous week’s 211K (revised from 210K).

Additionally, the 4-week moving average went down by 3K, bringing it to 207.75K from the revised average of the previous week (210.75K).

The report also indicated that Continuing Jobless Claims rose by 25K to 1.841M for the week ending March 21.

Market reaction

The Greenback rebounds markedly alongside escalating tensions in the Middle East, lifting the US Dollar Index (DXY) to two-day highs beyond the key 100.00 threshold.