TODAY, Monday, 02.02.2026

USD/INR:

The rupee appeared on course to open near its all-time low of 91.9875 per dollar, but the central bank's intervention helped shore it up to 91.60, a gain of 0.4% from its closing level on Friday.

India pushed manufacturing to the forefront of its budget but stopped short of the bold reforms sought by investors to boost investment amid rising geopolitical tensions.

          Indian stocks fell more than 2% in a special trading session on Sunday while bonds came under pressure after the weekend break. The yield on the 10-year benchmark bond rose 7 bps to 6.76% on Monday, hovering near its highest level since March 2025. Investor sentiment was hurt by a higher-than-anticipated government borrowing estimate. Additionally, an unexpected rise in the securities transaction tax on equity derivatives hurt equity markets sentiment.

On the day, local stock benchmarks were up about 0.2-0.4% as they regained some lost ground from Sunday.

"We remain negative on the Indian rupee and see it underperforming through 2026, and we also think India's local currency rates will likely grind higher," said Michael Wan, senior currency analyst at MUFG.

"Taken in totality, the (budget's) changes stuck more to the tried and tested in our view, and as such, is unlikely to change the trend of INR weakening for now."

A risk-off mood in global markets also complicated Indian assets' playing field on Monday as volatility in precious metal prices drove stocks lower across the board.

MAJOR WORLD CURRENCIES:

USD:

The dollar index and dollar index futures rose about 0.1% each in Asian trade, extending gains from last week, where the greenback rebounded sharply from a near four-year low.

Gains in the dollar came chiefly after Trump nominated former Fed governor Kevin Warsh as his pick to replace incumbent chair Jerome Powell at the head of the central bank. 

Warsh was seen largely agreeing with Trump’s calls for sharply lower rates. But he was also viewed as being critical of the Fed’s asset buying activities, suggesting that long-term monetary policy under Warsh may not be as dovish as markets were initially anticipating. 

“We expect a Warsh-led Fed to favour a smaller balance sheet, thereby not facilitating large fiscal expansion,” ANZ analysts wrote in a note. 

GBP/USD:

The GBP/USD pair trades on a flat note near 1.3695 during the early Asian session on Monday. Traders weigh what a Federal Reserve (Fed) under Kevin Warsh might look like. The US ISM Manufacturing Purchasing Managers Index (PMI) report will be published later on Monday. 

                 US President Donald Trump named Kevin Warsh to lead the US central bank. Markets anticipate Warsh may lean toward a smaller Fed balance sheet and hold the interest rate higher for longer, which provides some support to the US Dollar (USD) against the Pound Sterling (GBP).Financial markets anticipate the Bank of England (BoE) to hold the interest rates at 3.75% at its February meeting. This expectation follows hotter-than-expected UK inflation data and strong Retail Sales figures. According to all but two economists polled by Reuters, the UK central bank will hold its benchmark interest rate at 3.75% at its February meeting, with only a small majority now expecting it to fall to 3.50% in March following a slowdown in better economic news. The expectation of BoE gradual rate cuts could lift the Cable against the USD in the near term. 

EUR/USD:

EUR/USD edges modestly higher after opening with a downside gap, trading near 1.1840 during Monday’s Asian session. However, the pair remains vulnerable to further downside as the US Dollar (USD) finds support following President Donald Trump’s nomination of Kevin Warsh as the next Federal Reserve (Fed) Chair. Markets interpreted the appointment as signaling a more disciplined and cautious approach to monetary easing, lifting long-end Treasury yields and weighing on rate-sensitive assets after January’s strong rally.

               US producer-side inflation firmed, moving further away from the Federal Reserve’s 2% target and reinforcing the central bank’s policy stance. Data from the US Bureau of Labor Statistics showed PPI inflation holding steady at 3.0% year-over-year (YoY) in December, unchanged from November and above expectations for a moderation to 2.7%. Core PPI, excluding food and energy, accelerated to 3.3% YoY from 3.0%, defying forecasts for a decline to 2.9% and highlighting persistent upstream price pressures.

                    In the Eurozone, the economy expanded by 0.3% quarter-on-quarter in the three months to December 2025, matching the previous quarter’s pace, according to Eurostat’s preliminary estimate released Friday. GDP rose 1.4% YoY in Q4, unchanged from Q3 and exceeding expectations of 1.2%. Meanwhile, the unemployment rate edged lower to 6.2% in December from 6.3%.

GOLD:

Gold price (XAU/USD) tumbles to a two-week low below $4,700 during the Asian trading hours on Monday, pressured by some profit-taking. The precious metal extends the decline after reaching historic highs last week amid signs of political stability in the United States (US) as Kevin Warsh was selected to be the next Fed chair, easing concerns over the US central bank’s independence. 

                     On the other hand, ongoing geopolitical tensions, including US-Iran tensions, could underpin traditional safe-haven assets such as Gold. Traders will closely monitor the developments surrounding US-Iran negotiations, along with further clarity on Warsh’s policy direction. Additionally, rising demand from major central banks might contribute to the precious metal’s upside. 

The US ISM Manufacturing Purchasing Managers Index (PMI) data will be released later on Monday. The figure is expected to improve to 48.3 in January from 47.9 in December. If the report shows surprise to the downside, this could drag the US Dollar (USD) lower and lift the USD-denominated commodity price, as a weaker USD makes greenback-priced gold more attractive for foreign buyers. 

USD/INR Cash/Tom/Spot Levels: (in Paisa)

(Updated as on 02.02.2026@ 09.00am)

 Cash/Tom:  0.10/1.25       Cash/Spot: 0.20/2.50

 Tom/Spot:   0.10/1.25      Spot/Next: 0.10/1.25

Cash Date:     02.02.2026

Tom Date:       03.02.2026

Spot Date:      04.02.2026

Outlook for the day 02.02.2026: Rupee expected to trade in range of 91.30 to 91.80.

MAJOR WORLD CURRENCIES: as on (30.01.2026)

Foreign Currencies

Updated: 17:30 hrs. (12:00 GMT) on 30.01.2026

Precious Metals

Updated: 17:30 hrs. (12:00 GMT) as 30.01.2026

Stock Indices

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