- The Indian Rupee remains weak near all-time lows of around 92.00 against the US Dollar.
- FIIs continue to dump their stakes in the Indian equity market.
- Trump announces that he will unveil the name of the new Fed Chair soon.
The Indian Rupee (INR) holds onto weekly losses against the US Dollar (USD) on Friday. The USD/INR pair trades close to its all-time high of 92.00 posted on Wednesday. The outlook for the pair remains broadly firm as the Indian Rupee is expected to continue facing backlash amid the consistent withdrawal of foreign funds from the Indian stock market.
Foreign Institutional Investors (FIIs) are consistently offloading their stake in the Indian equity market amid the absence of a trade deal announcement between the United States (US) and India. However, negotiators from both nations have been expressing optimism about reaching a consensus soon.
On Wednesday, US President Donald Trump also praised Indian Prime Minister (PM) Narendra Modi during his visit to the World Economic Forum (WEF) at Davos, and expressed confidence that both nations will have a good deal. “I have great respect for your Prime Minister. He’s a fantastic man and a friend of mine. We are going to have a good deal,” Trump said, Moneycontrol reported.
So far in January, FIIs have remained net sellers in 14 of 15 trading days and have sold shares worth Rs. 36,591.01 crore.
On the economic data front, India’s flash HSBC Purchasing Managers’ Index (PMI) data for January has come in stronger than expected. The Composite PMI rose sharply to 59.5 from 57.8 in December, driven by strong output in both manufacturing and the services sector. The Manufacturing PMI came in at 56.8, higher than the prior reading of 55.0. The Services PMI expanded to 59.3 from 58.0 in December.
Going forward, there will be an extended weekend in the Indian markets as they will remain closed on Monday due to Republic Day.
The table below shows the percentage change of Indian Rupee (INR) against listed major currencies this week. Indian Rupee was the weakest against the Australian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | INR | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -1.29% | -1.01% | 0.36% | -0.86% | -2.46% | 1.07% | -1.33% | |
| EUR | 1.29% | 0.28% | 1.62% | 0.42% | -1.20% | 1.80% | -0.05% | |
| GBP | 1.01% | -0.28% | 1.09% | 0.14% | -1.48% | 1.77% | -0.33% | |
| JPY | -0.36% | -1.62% | -1.09% | -1.17% | -2.75% | 0.44% | -1.63% | |
| CAD | 0.86% | -0.42% | -0.14% | 1.17% | -1.59% | 1.60% | -0.47% | |
| AUD | 2.46% | 1.20% | 1.48% | 2.75% | 1.59% | 3.27% | 1.17% | |
| INR | -1.07% | -1.80% | -1.77% | -0.44% | -1.60% | -3.27% | -2.14% | |
| CHF | 1.33% | 0.05% | 0.33% | 1.63% | 0.47% | -1.17% | 2.14% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Indian Rupee from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent INR (base)/USD (quote).
Daily Digest Market Movers: Investors await new Fed Chair’s announcement
- The US Dollar’s rally against the Indian Rupee hits a pause after posting a fresh all-time high as the former faces selling pressure despite resolving geopolitical and trade disputes between the US and the European Union (EU) over Greenland’s entitlement.
- At the time of writing, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, wobbles near the two-week low of 98.26.
- US-EU disputes resolved after President Donald Trump rolled back 10% tariffs imposed on several members of the old continent and ruled out fears of military action on Greenland, after meeting with NATO Secretary General, Mark Rutte, in which they reached a framework of a “future deal with respect to Greenland, and in fact, the entire Arctic Region”.
- Market experts believe that the US-NATO framework is a temporary solution, but Trump’s “America First” priority, even at the cost of other nations’ reputation, is unfavorable for the US Dollar in the long run.
- “While a Greenland deal solves the immediate problem of tariffs and invasion, it doesn’t solve the core issue of the seeming alienation of allies from one another. And that’s not a good place to be if you want to preserve the USD’s reserve-currency status,» analysts at Macquarie Group said.
- On the monetary policy front, investors keenly await the announcement of the Federal Reserve’s (Fed) next Chair, which is expected soon. US President Trump said on Thursday that he has decided on the successor to Chair Jerome Powell, and will announce soon. “I’ll be telling you soon. I have somebody that I think will be very good,” Trump said.
- According to recent comments from White House officials, National Economic Council Director Kevin Hassett, BlackRock executive Rick Rieder, current Fed Governor Christopher Waller, and Michelle Bowman, and former Fed governor Kevin Warsh are top contenders to replace Fed’s Powell.
Technical Analysis: USD/INR holds key 20-day EMA
USD/INR trades firmly at 91.8115 as of writing. The 20-day Exponential Moving Average (EMA) trends higher at 90.8253 and underpins the advance. Price holds above this rising 20-day EMA, keeping the near-term bias upward.
The 14-day Relative Strength Index (RSI) at 72.84 (overbought) signals stretched momentum. Immediate support sits at the 20-day EMA, and bulls would retain control as long as the price is above it.
A pullback toward the average at 90.8253 could attract buyers, while a close below it would shift focus to consolidation.
(The technical analysis of this story was written with the help of an AI tool.)