Key Moments
- The US Dollar strengthened after Trump cited a “framework” Greenland deal and ruled out tariffs.
- USD/INR surged to a fresh record high and moved toward the upper rising-channel boundary near 92.00.
- India’s inflation rose to 1.33% in December but stayed well below the RBI’s 4% target.
Rupee Weakens as Dollar Breakout Accelerates
The Indian Rupee continues to slide against the US Dollar as USD/INR breaks to new record highs.
Technical momentum has accelerated the move, while RBI efforts to stabilize the currency have had little impact.
Meanwhile, shifting US policy expectations and global trade risks continue to drive the broader trend.
US Dollar Finds Support From Policy Signals
The US Dollar regained ground after President Trump said he reached a “framework” deal on Greenland and ruled out tariffs.
At the same time, attention turned to US monetary policy after Fed Governor Cook appeared before the Supreme Court.
The court appeared unlikely to support Trump’s attempt to remove her immediately.
Looking ahead, traders are focusing on incoming US data and the Federal Reserve’s rate outlook for 2026.
Recent US labor indicators have improved.
As a result, markets have trimmed expectations for rate cuts, now pricing about 47 basis points of easing by year-end.
Rupee Remains Under Pressure Despite Brief Relief
Despite a short-lived rebound, the Rupee remains locked in a clear downtrend against the Dollar.
USD/INR upside breakouts continue to reinforce bearish momentum for the currency.
Meanwhile, RBI intervention has failed to reverse the broader trend.
The Rupee briefly recovered when risk sentiment improved after Trump withdrew tariff threats.
However, the bounce faded quickly.
Fundamentally, conditions for the Rupee remain largely unchanged.
India Inflation Still Limits RBI Policy Response
India’s annual inflation rose to 1.33% in December from 0.71% in November.
Although inflation remains well below the RBI’s 4% target, it has moved closer to the lower bound of the 2%–6% tolerance range.
Even so, markets do not expect a rate cut at the RBI’s February meeting.
Trade Risks Add to Rupee Vulnerability
On the trade front, investors remain cautious after Trump warned of 25% tariffs on countries trading with Iran.
India has been one of Iran’s key trading partners in recent years.
As a result, renewed tariff risks could add further pressure to the Rupee.
USD/INR Technical Outlook
Daily Chart
USD/INR has reached a fresh all-time high and is approaching the upper boundary of a rising channel near 92.00.
Sellers may look for short opportunities near that zone with tight risk controls.
In contrast, buyers are watching for a clean breakout to target further highs.
4-Hour Chart
On the 4-hour timeframe, a rising trendline continues to support bullish momentum.
Buyers are using pullbacks toward this trendline as entry points.
Meanwhile, sellers are watching for a break below the 91.00 area to gain confidence.
1-Hour Chart
The 1-hour chart confirms the broader setup.
Dip buyers remain active near trend support.
However, sellers prefer either a clear breakdown or a test of channel resistance.
| Factor | Details |
|---|---|
| USD/INR trend | New record highs; rising-channel structure intact |
| Key resistance | Upper channel near 92.00 |
| Key support | Break below 91.00 increases downside conviction |
| India inflation | 1.33% in December, below RBI target |
| US rate outlook | Markets price 47 bps of easing by year-end |
Upcoming Data and Catalysts
In the near term, focus shifts to US economic data.
Later today, markets will assess weekly Jobless Claims.
Tomorrow, US Flash PMIs could shape growth expectations and influence USD/INR direction.
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