The Indian Rupee (INR) declines against the US Dollar (USD), with the USD\/INR pair reaching new highs at 90.86. The currency struggles amid uncertainty over a potential US-India trade deal.<\/p>\n
A two-day meeting between US and Indian representatives did not produce any resolutions on a trade deal. Though some optimism surfaced when US Trade Representative Jamieson Greer referred to India’s offer as the “best ever,” the lack of a formal agreement continues to weigh on the Rupee.<\/p>\n
India’s Commerce and Industry Minister, Piyush Goyal, suggested the US should sign the trade deal if satisfied with the offer. The Indian equity market may experience continued foreign outflows, with Foreign Institutional Investors selling stakes worth Rs. 18,491.29 crore in December.<\/p>\n
India’s November retail Consumer Price Index (CPI) aligns with expectations, showing inflation at 0.7%, up from 0.25% in October. USD\/INR remains above the 20-day Exponential Moving Average (EMA) at 89.8183, indicating a short-term uptrend.<\/p>\n
The 14-day Relative Strength Index (RSI) at 69.27 highlights strong bullish momentum, with a risk of fatigue on further gains. A break above the 90.86 high could push prices towards 92.00, while a close below the 20-day EMA might suggest a dip to 89.51.<\/p>\n
India’s economy has seen an average growth rate of 6.13% from 2006 to 2023, attracting significant foreign investment. Oil prices can affect the Rupee due to India’s high import reliance.<\/p>\n
Inflation changes impact the Rupee’s value, with rates above 4% prompting the RBI to adjust interest rates. India’s trade deficit, with imports exceeding exports, often influences USD demand. Volatility in USD demand further influences Rupee strength.<\/p>\n
Given the Rupee is trading at all-time lows against the US Dollar, we see the trend of Rupee weakness continuing. The primary driver is the ongoing uncertainty surrounding the US-India trade deal, which is keeping investors on edge. Unless a formal agreement is announced, we expect sentiment to remain negative for the Indian currency.<\/p>\n
This lack of a trade deal is fueling significant capital flight, with foreign investors pulling money out of Indian equities. So far in December 2025, we have seen foreign institutions sell a net amount of Rs. 18,491 crore. This trend is reminiscent of the outflows we witnessed during the global monetary tightening cycle of 2022 and 2023, and it puts direct downward pressure on the Rupee.<\/p>\n
From a technical standpoint, the uptrend in USD\/INR remains strong, with the price holding firmly above its 20-day moving average near 89.82. Traders can look at this level as a potential area to buy on any dips, with an eye on breaking the recent high of 90.86. A successful break above this resistance could clear the path for a move towards the 92.00 psychological level.<\/p>\n
The Relative Strength Index is high at 69.27, suggesting the bullish momentum is firm but the pair is approaching overbought conditions. This means that while the trend is up, we should be cautious of a potential short-term pullback or consolidation. A decisive close below the 20-day moving average would be the first sign of this bullish trend weakening.<\/p>\n
On the domestic front, November’s retail inflation figure of 0.7% is extremely low and well below the Reserve Bank of India’s 4% target. This gives the central bank little reason to raise interest rates, which are currently holding at 6.50% since the last policy meeting in early December 2025. This environment of low inflation and stable-to-lower interest rates makes holding Rupees less attractive for foreign capital.<\/p>\n
Furthermore, we must consider external factors like oil prices, which have a direct impact on India’s import bill. With Brent crude prices firming up to around $85 per barrel due to winter demand and recent OPEC+ production discipline, the demand for US Dollars from Indian importers is likely to remain elevated. This dynamic adds another layer of fundamental weakness for the Rupee in the coming weeks.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" Indian Rupee weakens as USD\/INR hits 90.86; trade deal uncertainty and foreign outflows pressure currency.<\/p>\n","protected":false},"author":62,"featured_media":16961,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-36735","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/36735","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/users\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/comments?post=36735"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/36735\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media\/16961"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=36735"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=36735"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=36735"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}