The Indian Rupee fell against the US Dollar during Monday afternoon trading in India, giving back earlier gains. USD/INR edged up to near 91.00 even as the US Dollar stayed under pressure.
The US Dollar Index (DXY) was down 0.21% at about 97.45 after trimming earlier losses. The move followed a US Supreme Court ruling that President Donald Trump exceeded his authority under the International Emergency Economic Powers Act (IEEPA) when setting wide tariffs.
Supreme Court Ruling And Tariff Fallout
After the ruling, Trump said he was “ashamed of certain members of the court” and announced 15% global tariffs. The US Dollar was also weighed by weaker data, with Q4 GDP at an annualised 1.4% versus a 3% estimate and a prior 4.4%, while the S&P Global Composite PMI eased to 52.3 from 53.0.
The court decision and the new 15% tariff rate compared with 18% discussed in US-India talks may support the position of Indian exporters. A planned visit by Indian trade negotiators to the US was delayed for an uncertain period.
Foreign Institutional Investors sold Rs. 2,011.24 crore of Indian equities in February and sold Rs. 934.61 crore on Friday. USD/INR held above the 20-day EMA at 90.888, while the 14-day RSI stayed in the 40.00–60.00 range.
Looking back to early 2025, we saw the USD/INR pair consolidating around the 91.00 level, reacting to uncertainty over US trade policies and a weaker dollar. That period was marked by US Supreme Court rulings against presidential tariffs and soft economic data. The situation now, in late February 2026, presents a very different dynamic for the currency pair.
The dollar has strengthened significantly over the past year, driven by the Federal Reserve’s continued fight against persistent inflation. With the Fed raising its key interest rate to 5.75% earlier this month and US Q4 2025 GDP growth coming in at a solid 2.8%, the fundamental support for the dollar is much stronger than it was. We are now seeing the USD/INR trading firmly around 93.50, well above the old pivot points.
India Inflows And Rbi Volatility Management
On the other hand, the Indian economy remains resilient, supported by strong foreign portfolio investor (FPI) inflows, which contrasts sharply with the net selling we observed in February 2025. FPIs have poured over $3 billion into Indian markets this month, providing a cushion for the Rupee. The Reserve Bank of India is also actively managing volatility, preventing a disorderly depreciation despite the dollar’s broad strength.
This tension between a hawkish Fed and strong Indian inflows suggests that outright directional bets are risky. Traders should consider strategies that benefit from this push-and-pull, such as buying USD/INR call options to gain upside exposure with limited risk. Selling out-of-the-money put options could also be a viable strategy to collect premium, banking on the RBI’s support to limit any sudden, sharp declines in the pair.
With the pair consistently trading above its key 20- and 50-day moving averages, the technical trend remains upward but is likely to face headwinds. Implied volatility has increased, reflecting the current uncertainty, which makes option premiums more expensive. This environment favors strategies that either define risk clearly or capitalize on elevated premiums while acknowledging the strong underlying, but conflicting, market forces.
