USD/INR recovered from moderate losses in the previous session, helped by feeble risk sentiment in Asia and cash flow pressures. Traders note that the Reserve Bank of India (RBI) remains a key hedge against a break beyond the psychological level of 92.00.
The Indian rupee (INR) hit a record high of 92.51 against the US dollar (USD) on Wednesday, led by NDF maturities-related dollar purchases and chronic supply-demand imbalances.
The INR is under additional pressure from higher dollar demand from bullion imports, continued equity outflows and rising depreciation expectations, while ponderous export hedging continues to limit dollar supply.
Most economists polled by Reuters expect the Reserve Bank of India (RBI) to keep its policy rate at 5.25% until 2026 as the central bank assesses the economic impact of previous rate cuts.
The US dollar is gaining thanks to robust dollar policy
- The U.S. Dollar Index (DXY), which measures the value of the U.S. dollar against six major currencies, has recovered from recent losses from the previous session and is trading around 96.50 at the time of writing.
- Bloomberg reported delayed Thursday that US President Donald Trump said he would announce his decision to replace Jerome Powell as chairman of the Federal Reserve (Fed) on Friday morning. Trump has said his pick will do a “good job” and that he wants the U.S. central bank to cut interest rates when there are signs of economic growth.
- The dollar found support after Treasury Secretary Scott Bessent reaffirmed the U.S. commitment to a “strong dollar policy,” refuting earlier comments from U.S. President Donald Trump who suggested tolerance for a weaker currency. Bessent stressed that solid US fundamentals and sound policy arrangements should continue to attract capital inflows, dismissing speculation of any US intervention to sell the dollar against the Japanese yen (JPY).
- At its January meeting on Wednesday, the US Federal Reserve (Fed) decided to keep interest rates unchanged, pointing to still elevated inflation and stable economic growth.
- Fed Chair Jerome Powell noted during a post-meeting press conference that job growth has slowed and the unemployment rate is showing signs of stabilizing, adding that the Fed is “well-prepared” to assess incoming data on a meeting-by-meeting basis and remains outside a predetermined path for future interest rate decisions.
- Morgan Stanley analysts wrote in a note that further monetary easing depends largely on clear evidence of disinflation, which they believe will emerge later in 2026. As a result, they maintain their forecast of interest rate cuts in June and September.
- US President Donald Trump will soon announce his candidacy to replace Fed Chair Jerome Powell, fueling speculation that the next chairman will favor faster interest rate cuts.
- Indian Prime Minister Narendra Modi’s government has agreed to immediately cut tariffs on selected vehicles priced above €15,000, with rates expected to gradually drop to 10%, making it easier for carmakers such as Volkswagen, Mercedes-Benz and BMW to access the market.
USD/INR is hovering around 92.00 amid continued bullish momentum
At the time of writing, the USD/INR rate is around 92.10. Daily chart analysis indicates a continued bullish bias, with the pair remaining in a rising channel formation. However, the 14-day relative strength index (RSI) of 69.72 is just below the overbought threshold, confirming robust bullish momentum.
The nine-day exponential moving average (EMA) is above the 50-day EMA, with the short-term average rising and maintaining upward pressure. The deepening separation between them favors the continuation of the trend.
Initial resistance is at an all-time high of 92.51 on January 28. A break above this level would support the USD/INR pair to approach the upper boundary of the ascending channel near 93.60. On the other hand, immediate support lies at the lower channel support around 92.00, followed by the nine-day exponential moving average (EMA) at 91.71. Further declines would expose the 50-day EMA at 90.46.
(The technical analysis for this story was written with the support of an AI tool.)
Today’s US dollar price
The table below shows the current percentage change of the United States Dollar (USD) against the major listed currencies. The US dollar was strongest against the Australian dollar.
| USD | EUR | GBP | JPY | BOOR | AUD | NZD | INR | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.36% | 0.40% | 0.52% | 0.24% | 0.66% | 0.51% | 0.06% | |
| EUR | -0.36% | 0.04% | 0.15% | -0.10% | 0.30% | 0.15% | -0.30% | |
| GBP | -0.40% | -0.04% | 0.13% | -0.17% | 0.26% | 0.11% | -0.35% | |
| JPY | -0.52% | -0.15% | -0.13% | -0.28% | 0.14% | -0.02% | -0.44% | |
| BOOR | -0.24% | 0.10% | 0.17% | 0.28% | 0.42% | 0.26% | -0.19% | |
| AUD | -0.66% | -0.30% | -0.26% | -0.14% | -0.42% | -0.15% | -0.60% | |
| NZD | -0.51% | -0.15% | -0.11% | 0.02% | -0.26% | 0.15% | -0.46% | |
| INR | -0.06% | 0.30% | 0.35% | 0.44% | 0.19% | 0.60% | 0.46% |
The heat map shows the percentage changes of the major currencies relative to each other. The base currency is selected from the left column and the quote currency from the top row. For example, if you select the US dollar from the left column and move along the horizontal line to the Japanese yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
Indian Rupee FAQs
The Indian rupee (INR) is one of the most sensitive currencies to external factors. The price of oil (the country is largely dependent on imported oil), the value of the US dollar – most trade takes place in USD – and the level of foreign investment are influenced. Direct intervention by the Reserve Bank of India (RBI) in the foreign exchange markets to maintain a stable exchange rate, as well as the level of interest rates set by the RBI, are other major factors influencing the rupee rate.
The Reserve Bank of India (RBI) actively intervenes in the forex markets to maintain a stable exchange rate and facilitate trading. Moreover, the RBI is trying to keep the inflation rate at the target of 4% by adjusting the interest rates. Higher interest rates tend to strengthen the rupee. This is due to the role of the “carry trade”, in which investors borrow from countries with lower interest rates to put their money in countries offering relatively higher interest rates and profit from the difference.
Macroeconomic factors affecting the value of the rupee include inflation, interest rates, economic growth rate (GDP), trade balance and foreign investment inflows. A higher growth rate may lead to more foreign investment, increasing demand for the rupee. A less negative trade balance will ultimately lead to a stronger rupee. Higher interest rates, especially real rates (interest rates net of inflation), are also positive for the rupee. A risk-laden environment may lead to higher inflows of foreign direct and indirect investment (FDI and FII), which also benefits the rupee.
Higher inflation, especially if comparable to Indian inflation, is generally negative for the currency as it reflects devaluation due to oversupply. Inflation also increases the cost of exports, which leads to more rupees being sold to buy foreign imports, which is negative against the rupee. At the same time, higher inflation usually leads to the Reserve Bank of India (RBI) raising interest rates, which can be positive for the rupee due to increased demand from international investors. The opposite effect occurs in the case of lower inflation.
