The rupee extended Monday’s gains as the Reserve Bank of India introduced fresh measures aimed at easing US dollar demand. In afternoon trade, USD/INR fell 0.6% to around 95.00, its lowest level in more than a month. The central bank set up a special dollar window to meet the requirements of three state-run oil companies, halted the re-booking of cancelled rupee-linked FX derivative contracts, and imposed an FX risk reserve requirement on transactions above $2mn. Separately, India’s September retail CPI rose to 5.54% YoY, above the 5.4% forecast and 4.83% previously, while remaining within the RBI’s 2%-6% tolerance band; the RBI has projected inflation at 6.0% in 3QFY27 and 5.7% in 4QFY27.
US Economic Data and Fed Communications
Attention then shifts to US September CPI due Wednesday, expected at 3.7% YoY versus 3.4% in August, with core CPI seen at 2.5% from 2.4%. Fed communications data showed an FXS Speechtracker score of 8.4/10 against a 7.5/10 average, while the FXS Fed Sentiment Index rose 0.59 points to 138.92, above the neutral 100. Technically, USD/INR was at 95.28, below the 20-day EMA at 96.02 as RSI stood at 37.8, with support near 94.30 and resistance around 96.03.
Start trading now — click here to create your real VT Markets account.
