USD/INR trades firmly as Fed dovish bets recede, US NFP awaited
- The Indian Rupee opens lower to near 88.85 against the US Dollar ahead of the US NFP data for September.
- Many FOMC members opposed another rate cut in December.
- The RBI is expected to cut the Repo Rate further this year.
The Indian Rupee (INR) opens on a negative note against the US Dollar (USD) on Thursday. The USD/INR pair jumps to near 88.85 as the US Dollar (USD) outperforms its peers, following the release of the Federal Open Market Committee (FOMC) minutes of the October policy meeting on Wednesday. In the policy meeting, the Fed decided to cut interest rates by 25 basis points (bps) to 3.75%-4.00%.
At the time of writing, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, revisits an over five-month high of around 100.40.
The FOMC minutes showed that few policymakers would have been satisfied even if interest rates were held steady, as the outright rate cut for the second time in a row could stall progress in inflation returning to the central bank’s 2% target.
Over the December policy meeting, officials were divided about reducing interest rates again, citing that further monetary expansion could boost inflation expectations and dampen households’ trust in the central bank’s commitment to bring inflation lower to the 2% target in a timely manner.
Remarks from many Fed officials pointing to a pause in the monetary expansion cycle have resulted in a further reduction in bets supporting an interest rate cut in December. According to the CME FedWatch tool, the probability of the Fed cutting interest rates by 25 basis points (bps) to 3.50%-3.75% in the December meeting has diminished to 32.8% from 50.1% seen a day before the FOMC minutes release.
The table below shows the percentage change of Indian Rupee (INR) against listed major currencies today. Indian Rupee was the weakest against the Australian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | INR | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.06% | -0.06% | 0.38% | -0.01% | -0.20% | 0.24% | 0.06% | |
| EUR | -0.06% | -0.13% | 0.31% | -0.07% | -0.26% | 0.16% | -0.00% | |
| GBP | 0.06% | 0.13% | 0.41% | 0.06% | -0.13% | 0.30% | 0.12% | |
| JPY | -0.38% | -0.31% | -0.41% | -0.38% | -0.56% | -0.12% | -0.32% | |
| CAD | 0.00% | 0.07% | -0.06% | 0.38% | -0.18% | 0.24% | 0.07% | |
| AUD | 0.20% | 0.26% | 0.13% | 0.56% | 0.18% | 0.43% | 0.25% | |
| INR | -0.24% | -0.16% | -0.30% | 0.12% | -0.24% | -0.43% | -0.16% | |
| CHF | -0.06% | 0.00% | -0.12% | 0.32% | -0.07% | -0.25% | 0.16% |
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: Indian Rupee weakens on RBI dovish expectations
- A strong opening by the USD/INR pair on Thursday is also driven by weakness in the Indian Rupee. The Indian currency has come under pressure as investors turn anxious over the delay in the announcement of a trade deal between the United States (US) and India.
- Top negotiators from both nations have said that they are close to reaching a deal; however, an absence of a concrete announcement has kept investors on edge.
- Meanwhile, growing acceptance among financial market participants that the Reserve Bank of India (RBI) will cut interest rates in its December policy meeting is also keeping the Indian Rupee under pressure.
- RBI dovish bets have accelerated due to cooling inflationary pressures. In October, the retail inflation decelerated at a faster-than-expected pace to 0.25% on an annualized basis, driven by soft food prices and tax cuts in consumer goods announced in the third quarter of the year. This was the second straight month when the inflation data came below the RBI’s tolerance range of 2%-6%.
- Going forward, investors will focus on India’s flash HSBC Purchasing Managers’ Index (PMI) data for November, which will be released on Friday.
- In Thursday’s session, the major trigger for the USD/INR pair will be the US Nonfarm Payrolls (NFP) data for September, which will be published at 13:30 GMT. Investors will pay close attention to the official employment data as it will influence market expectations for the Fed’s monetary policy outlook.
- Economists expect US employers to have created 50K fresh jobs, higher than 22K in August. The Unemployment Rate is seen unchanged at 4.3%. Average Hourly Earnings, a key measure of wage growth, is expected to have grown steadily by 0.3% and 3.7% on a monthly as well as annual basis.
Technical Analysis: USD/INR bounces back from 20-day EMA
The USD/INR pair jumps to near 88.80 on Thursday. The pair snaps a four-day losing streak after attracting bids below the 20-day Exponential Moving Average (EMA), which trades around 88.70.
The 14-day Relative Strength Index (RSI) rebounds towards 60.00. A decisive break by the RSI above that level would trigger a bullish momentum.
Looking down, the August 21 low of 87.07 will act as key support for the pair. On the upside, the all-time high of 89.12 will be a key barrier.
Economic Indicator
FOMC Minutes
FOMC stands for The Federal Open Market Committee that organizes 8 meetings in a year and reviews economic and financial conditions, determines the appropriate stance of monetary policy and assesses the risks to its long-run goals of price stability and sustainable economic growth. FOMC Minutes are released by the Board of Governors of the Federal Reserve and are a clear guide to the future US interest rate policy.
Last release: Wed Nov 19, 2025 19:00
Frequency: Irregular
Actual: -
Consensus: -
Previous: -
Source: Federal Reserve
Minutes of the Federal Open Market Committee (FOMC) is usually published three weeks after the day of the policy decision. Investors look for clues regarding the policy outlook in this publication alongside the vote split. A bullish tone is likely to provide a boost to the greenback while a dovish stance is seen as USD-negative. It needs to be noted that the market reaction to FOMC Minutes could be delayed as news outlets don’t have access to the publication before the release, unlike the FOMC’s Policy Statement.