USD/INR is weakened by the renewed entry of foreign capital

  • Indian rupee is strengthened in Monday’s Asian session.
  • The prospects for foreign capital tickets and a weaker US dollar support the INR.
  • Investors prepare for the PMI of HSBC of India and the data of the US PMI of the US S&P that will be published later on Wednesday.

The Indian rupee (INR) advances on Monday. Renewed entries of foreign capital and the weakness of the US dollar (USD) continue to support the local currency. Concerns about the economic impact of the new tariffs on the US economy dragged the dollar down. Investors will be attentive to whether the administration of US President Donald Trump reaches new trade agreements with their partners.

Meanwhile, the hard line statements of the US Federal Reserve (FED) have reduced the probability of a rate reduction in June, which could raise the USD in the short term. In addition, markets will be observing the Indian Reserve Bank (RBI), which seems to be buying USD to stop the increase in INR. The US FED manufacturing index of Richmond for April will be published on Tuesday. On Wednesday, the India HSBC Purchase Managers Index (PMI) for April and the US PMI reports will be the outstanding points.

Indian rupee quotes firmer in the midst of unpredictable American tariffs

  • Dr. VK Vijayakumar, head of investments in Geojit Financial Services, said that FII entries and global trends offer support to the INR. “This reversal has been driven by the weakness of the dollar index and the expectations of greater smoothness of the dollar, which is encouraging the FII to move from the US to emerging markets as India,” Vijayakumar said.
  • Moody’s Ratings said the Indian economy could grow in a range of 5.5% to 6.5% during the 2025 calendar year, below its February projection of 6.6%.
  • The president of the Fed of San Francisco, Mary Daly, said Friday that, although she still feels comfortable with a couple of interest rate cuts this year, the growing risks of inflation mean that the Fed may need to do less, especially given the uncertainty about the commercial policy of President Donald Trump.
  • Financial markets expect the Fed to resume fees in June and that by the end of the year the policy rate, currently in the range of 4.25%-4.50%, is a lower percentage point.

The bassist bias of the USD/INR persists below the 100 -day Ema

Indian rupee quotes on a stronger note in the day. The USD/INR pair maintains the bassist vibes in the daily chart, with the price being below the exponential average (EMA) medium key of 100 days. The downward impulse is supported by the 14 -day relative force (RSI) index, which is below the midline about 38.10.

The key support level for the USD/INR arises in the area of ​​85.00-84.95, representing the psychological level and lower limit of the descending trend channel. A rupture of this level could expose 84.53, the minimum of December 6, 2024. More to the south, the following objective to be observed is 84.22, the minimum of November 25, 2024.

On the positive side, the first upward barrier is found at 85.87, the 100 -day EMA. Any purchase of monitoring above the mentioned level could see a rebound around 86.55, the upper limit of the trend channel. The additional filter to observe is 86.71, the maximum of April 9.

India Faqs Rupia


Indian rupee (INR) is one of the most sensitive currencies to external factors. The price of crude oil (the country depends largely on imported oil), the value of the US dollar (most of the trade is carried out in US dollars) and the level of foreign investment are all influential factors. The direct intervention of the Bank of the Reserve of India (RBI) in the currency markets to keep the exchange rate stable, as well as the level of the interest rates set by the RBI, are other important factors that influence the rupee.


The Bank of the Reserve of India (RBI) actively intervenes in the currency markets to maintain a stable exchange rate and help facilitate trade. In addition, the RBI tries to maintain the inflation rate in its 4% target adjusting interest rates. Higher interest rates often strengthen rupee. This is due to the role of the “Carry Trade”, in which investors borrow in countries with lower interest rates to place their money in countries that offer relatively higher interest rates and benefit from difference.


Macroeconomic factors that influence the value of rupee include inflation, interest rates, economic growth rate (GDP), trade balance and foreign investment tickets. A higher growth rate can lead to greater investment abroad, increasing the demand for rupee. A less negative trade balance will eventually lead to a stronger rupee. The highest interest rates, especially real types (less inflation interest rates) are also positive for rupee. A risk environment can generate higher direct and indirect foreign investment entries (FI and FII), which also benefit the rupee.


Higher inflation, particularly if it is comparatively higher than other countries, is generally negative for the currency, since it reflects a devaluation through excess supply. Inflation also increases the cost of exports, which leads to more rupees to buy foreign imports, which is negative for Indian rupee. At the same time, higher inflation usually leads to the Bank of the Reserve of India (RBI) to raise interest rates and this can be positive for rupee, due to the increase in demand for international investors. The opposite effect applies to lower inflation.

Source: Fx Street

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