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Indian Rupee may regain its ground due to expected progress on a US-India trade agreement. USD/INR’s downside could be restrained due to importer hedging demand and potential RBI dollar-buying interventions. The INR may struggle due to improved crude oil prices, driven by OPEC+’s decision to ramp up production more quickly. The Indian Rupee (INR) edges lower against the US Dollar (USD) during the Asian hours on Tuesday. However, the USD/INR pair may continue to encounter resistance as the INR gains support from certain market factors. Investors are closely watching the Federal Reserve’s policy decision, along with any progress on a US-India trade agreement and ongoing cross-border tensions.  The Indian Rupee drew support from strong equity inflows amounting to ₹2,769.81 crore. Furthermore, the recent launch of a new 10-year government bond with a 6.33% coupon saw solid demand and met market expectations. This favorable response may encourage additional foreign investment, further strengthening the Rupee. The downside for the USD/INR pair may be capped by importer hedging demand and potential dollar-buying interventions by the Reserve Bank of India (RBI). The central bank is expected to continue bolstering its foreign exchange reserves, which have risen for the eighth straight week, reaching a more than six-month high of $688 billion as of April 25. Additionally, the continued recovery in crude Oil prices puts downward pressure on the INR as India is the world’s third-largest Oil consumer. However, Oil gains were capped by concerns over rising global supply following an OPEC+ decision to accelerate output increases. Last week, OPEC+, the Organization of the Petroleum Exporting Countries and its allies, agreed to ramp up production for a second straight month, announcing an additional 411,000 barrels per day (bpd) increase for June. Indian Rupee advances as US Dollar appreciates ahead of Fed policy decision The US Dollar…

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Filed under: News - @ May 6, 2025 3:18 am