The Indian Rupee stayed weaker against the US Dollar on Friday, with USD\/INR near 91.20. The move followed higher oil prices and limited foreign buying in Indian shares.<\/p>\n
Oil prices rose after reports that the US could take military action against Iran, with the Wall Street Journal saying President Donald Trump is weighing a limited strike. Oil-importing economies often see their currencies weaken when oil is more expensive.<\/p>\n
Foreign Institutional Investors were net sellers in February, cutting holdings by Rs. 1,076.63 crore, based on NSE data. On Thursday, overseas investors sold Rs. 880.49 crore.<\/p>\n
Reuters reported that traders expect the Reserve Bank of India to have intervened in local and spot markets to support the Rupee. India\u2019s HSBC Composite PMI eased to 59.3 in February from 59.4 in January.<\/p>\n
The US Dollar Index traded near 98.00, a four-week high, after FOMC minutes showed no hurry to cut rates while inflation stays above the Fed\u2019s 2% target. Markets were also focused on US preliminary Q4 GDP, expected at 3% annualised versus 4.4% in Q3 2025, and February S&P Global PMI.<\/p>\n
USD\/INR was around 91.10 and above the 20-day EMA at 90.89, with the 14-day RSI at 54.99. Resistance was noted near 91.66, with support near 90.15.<\/p>\n
Based on the current environment, we see a clear weakening of the Indian Rupee against a strengthening US Dollar. This is driven by high oil prices stemming from geopolitical tensions and a notable exit of foreign investors from Indian markets. The USD\/INR pair is consequently trading at a high of nearly 91.20, and we anticipate this upward trend will continue.<\/p>\n
The rise in oil prices is a significant headwind for the Rupee, as India is a major importer. We’ve seen Brent crude futures for April delivery jump over 8% this past week, trading near $115 a barrel, reminiscent of the price action we saw back in early 2022. This directly increases demand for US Dollars from Indian importers, putting further downward pressure on the local currency.<\/p>\n
Adding to this pressure, foreign institutional investors are pulling money out of Indian equities, having sold a net of Rs. 1,076.63 crore so far this month. Looking back, we saw a similar pattern of outflows in late 2025 when global risk aversion picked up. This lack of foreign investment removes a key pillar of support for the Rupee.<\/p>\n
On the other side of the currency pair, the US Dollar is showing significant strength. The Federal Reserve’s recent meeting minutes suggest they are in no rush to lower interest rates, especially with recent US CPI data showing core inflation still running at 3.1%. This makes holding dollars more attractive than currencies from economies facing domestic headwinds.<\/p>\n
We believe the Reserve Bank of India is trying to slow the Rupee’s fall by selling dollars, but this is unlikely to reverse the trend. With India\u2019s foreign exchange reserves having dipped by about $5 billion in the last reported week to $640 billion, the capacity for sustained, heavy intervention is limited. The underlying market forces point to a weaker Rupee in the immediate future.<\/p>\n
For the coming weeks, we should consider positioning for a further rise in the USD\/INR pair. This can be done by buying USD\/INR call options with strike prices around 91.50 and 92.00 for the March expiry. This strategy allows us to profit from the expected upward move while limiting our risk to the premium paid.<\/p>\n
We will be watching the 20-day EMA, currently near 90.89, as a critical support level for this bullish outlook. A sustained move above the January low of 91.66 would confirm the upward momentum. A break of this level would signal a likely test of the 92.00 psychological barrier in the near term.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" Rupee weakens near 91.20 as oil rises, foreign outflows persist, RBI intervenes, and dollar firms.<\/p>\n","protected":false},"author":62,"featured_media":16963,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-42425","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\/42425","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=42425"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/42425\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media\/16963"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=42425"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=42425"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=42425"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}