USD/INR trades cautiously as US-India trade deal improves FIIs sentiment
- The Indian Rupee shows strength against the US Dollar, continuing its strength from the US-India trade deal confirmation.
- FIIs turned out to be net buyers in the Indian stock market on the US-India trade deal euphoria.
- Investors await US data and the RBI monetary policy announcement.
The Indian Rupee (INR) demonstrates strength against the US Dollar (USD) on Wednesday, with the USD/INR pair holding onto losses near 90.55.
The near-term trend of the pair seems fragile as the broader outlook of the Indian Rupee has improved, following the trade deal announcement between the United States (US) and India by President Donald Trump. The acknowledgement of the long-awaited US-India trade deal appears to have improved the sentiment of foreign investors toward the Indian equity market.
On Tuesday, Foreign Institutional Investors (FIIs) turned out to be net buyers and purchased stocks worth Rs. 5,236.28 crore, the highest inflow of overseas funds seen since October 28, 2025, Economic Times (ET) reported.
While market participants were cautious about whether the Indian government had sacrificed its “non-compromise” policy on critical sectors, such as agriculture and dairy, Commerce Minister Piyush Goyal has clarified that these sectors were protected from international exposure during negotiations.
Going forward, investors will focus on the Reserve Bank of India’s (RBI) monetary policy announcement on Friday, in which it is expected to leave the Repo Rate unchanged at 5.25%.
The table below shows the percentage change of Indian Rupee (INR) against listed major currencies today. Indian Rupee was the strongest against the Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | INR | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.07% | -0.12% | 0.42% | -0.01% | -0.13% | 0.03% | -0.03% | |
| EUR | 0.07% | -0.05% | 0.50% | 0.06% | -0.06% | 0.10% | 0.04% | |
| GBP | 0.12% | 0.05% | 0.56% | 0.11% | -0.01% | 0.16% | 0.10% | |
| JPY | -0.42% | -0.50% | -0.56% | -0.43% | -0.55% | -0.39% | -0.45% | |
| CAD | 0.01% | -0.06% | -0.11% | 0.43% | -0.12% | 0.06% | -0.01% | |
| AUD | 0.13% | 0.06% | 0.01% | 0.55% | 0.12% | 0.18% | 0.10% | |
| INR | -0.03% | -0.10% | -0.16% | 0.39% | -0.06% | -0.18% | -0.06% | |
| CHF | 0.03% | -0.04% | -0.10% | 0.45% | 0.01% | -0.10% | 0.06% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Indian Rupee from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent INR (base)/USD (quote).
Daily Digest Market Movers: Investors await key US economic data
- The US Dollar trades broadly calm against its other currency peers ahead of the release of US ADP Employment Change and the ISM Services Purchasing Managers’ Index (PMI) data for January, which will be published during the North American session.
- At the time of writing, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, trades slightly higher to near 97.50. The DXY is close to its weekly high of 97.73 posted on Monday.
- The US ADP employment report is expected to show that private employers added 48K fresh workers, slightly higher than 41K in December. A slight improvement in the job data is unlikely to provide relief to Federal Reserve (Fed) officials, who have been expressing labor market concerns for months.
- The US ISM Services PMI is seen arriving at 53.5, lower than 54.4 in December, indicating that the service sector activity continued to advance but at a moderate pace.
- Upbeat US data would dampen market expectations for an interest rate cut by the Fed in the near term. Currently, traders seem confident that the Fed will leave interest rates unchanged in the range of 3.50%-3.75% in the March policy meeting, according to the CME FedWatch tool.
- Meanwhile, the US government's partial shutdown has ended as the House advanced the bill to fund federal agencies on Tuesday.
- The US Dollar had a strong rally in the past few trading days, following President Trump's nomination of Kevin Warsh as the new Fed Chairman. The event was positive for the US Dollar, but unfavorable for precious metals and US equities, given Warsh’s preference for a firmer US Dollar in his previous work at the Fed.
Technical Analysis: USD/INR stays below 20-day EMA
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USD/INR trades marginally lower at around 90.55 as of writing. The pair holds below the 20-day Exponential Moving Average (EMA) at 91.0466, which slopes lower and caps rebound attempts. The declining 20-day EMA keeps the near-term trend tilted lower.
The 14-day Relative Strength Index (RSI) at 44.82 (neutral) slips beneath the midline, confirming waning upside momentum.
A close back above the 20-day EMA would temper bearish pressure and could pave the way for stabilization. Failure to reclaim it, alongside an RSI that stays under 50 or drifts toward 40, would maintain downside risk and keep rallies vulnerable to supply. Momentum would improve only if RSI returns above 50 and price establishes acceptance over the average.
(The technical analysis of this story was written with the help of an AI tool.)