The Indian Rupee (INR) strengthened on Monday, buoyed by expectations of potential intervention from the Reserve Bank of India (RBI). However, lingering concerns over US President Donald Trump’s fresh tariff measures on Canada, Mexico, and China could curb the Rupee’s upside momentum. Rising crude oil prices — a key import for India — may also weigh on the local currency, as the country remains the world’s third-largest oil consumer.
Economic Data in Focus
Investors are eyeing the release of India’s HSBC Manufacturing Purchasing Managers’ Index (PMI) for February, due later on Monday, for further market direction. Meanwhile, the US ISM Manufacturing PMI will provide insights into the US economic outlook, which could influence the USD/INR trajectory.
India’s Growth Moderates Amid Global Uncertainty
Data from the National Statistical Office (NSO) on Friday showed India’s Gross Domestic Product (GDP) grew 6.2% year-on-year in the fourth quarter of 2024, falling short of the 6.3% market forecast and slowing from the revised 5.6% growth in the previous quarter. Despite the moderation, India’s economy remains one of the fastest-growing in the world.
US Dollar Outlook
The US Dollar (USD) remains supported by higher Treasury yields and recent inflation data. The US Personal Consumption Expenditures (PCE) Price Index rose 0.3% in January, in line with expectations, while the core PCE Price Index — the Federal Reserve’s preferred inflation gauge — eased to 2.6% year-on-year, down from December’s 2.9%. The data reinforced expectations of a Fed rate cut in the second half of 2025.
Technical Analysis: USD/INR Holds Bullish Bias
The USD/INR pair maintains a positive outlook, trading above the key 100-day Exponential Moving Average (EMA) with the 14-day Relative Strength Index (RSI) hovering near 63.75 — signaling bullish momentum.
Immediate resistance lies at 87.53 (February 28 high), with a breakout potentially propelling the pair toward 88.00 and 88.50 — fresh all-time highs. On the downside, support is seen at 87.00 (February 27 low), with further losses opening the door to 86.48 and 86.14.
Market participants will closely monitor upcoming data releases and geopolitical developments for fresh directional cues.
Related Topics:
