The Indian Rupee (INR) lost momentum on Thursday, weighed down by concerns over potential tariff retaliations and increased month-end demand for the US Dollar (USD) from importers. A surge in crude oil prices further pressured the currency, as India—one of the world’s largest oil consumers—faces heightened import costs.
Despite these headwinds, a positive outlook in domestic equities and renewed foreign fund inflows could provide some relief to the INR. Additionally, the Reserve Bank of India (RBI) is expected to intervene in the foreign exchange market to prevent excessive depreciation. Investors now turn their attention to key US economic data releases later in the day, including weekly Initial Jobless Claims, final fourth-quarter Gross Domestic Product (GDP), and Pending Home Sales.
INR Remains Volatile Amid Global Uncertainty
Foreign investors have shown renewed interest in Indian assets, purchasing over $2 billion worth of equities in the past four days, while month-to-date bond inflows have exceeded $3 billion. However, global uncertainties continue to weigh on the currency.
Adding to market concerns, former US President Donald Trump signed an order late Wednesday imposing a 25% tariff on auto imports, set to take effect on April 2. The US will begin collecting the tariffs the following day, though Trump has allowed a one-month reprieve for auto parts imports, according to Reuters.
Meanwhile, US economic data showed resilience, with Durable Goods Orders rising 0.9% in February. This figure surpassed market expectations of a 1% decline, though it remained below the revised 3.3% increase recorded in January.
USD/INR Outlook Remains Bearish
The INR weakened further on Thursday, keeping the bearish outlook for the USD/INR pair intact. The pair continues to trade below the key 100-day Exponential Moving Average (EMA), while the 14-day Relative Strength Index (RSI) stands near 36.0—suggesting a downward bias.
Key support for USD/INR is located at 85.56, the March 26 low. A break below this level could push the pair further down to 84.84, last seen on December 19, and 84.22, the November 25 low.
On the upside, resistance is expected in the 85.95–86.00 range, aligning with the 100-day EMA and a psychological barrier. A move beyond this zone could bring 86.48 (February 21 low) into focus, followed by the 87.00 mark.
Investors will continue to monitor global market cues and US economic data for further direction in the coming sessions.
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