The Indian Rupee (INR) is trading flat at the start of the week, hovering around 90.45 against the US Dollar. While the currency has stabilized, it faces significant pressure from rising global oil prices and sustained foreign fund outflows. Crude oil has rallied nearly 6% since Thursday, driven by fears of supply disruptions (potentially 1.9 million bpd) due to civil unrest in Iran.
Equity & Trade Talks Foreign Institutional Investors (FIIs) have sold off Rs. 11,786.82 crore in Indian equities so far in January, weighing on the Rupee. However, market sentiment improved after US Ambassador Sergio Gor announced upcoming trade talks on Tuesday and an invitation for India to join “Pax Silica” in February. This news triggered a sharp recovery in the Nifty50 index.
Inflation & Fed Controversy On the macro front, India’s December retail inflation came in at 1.33%, lower than the projected 1.5%. Meanwhile, the US Dollar has corrected sharply (DXY near 99.10) following news of criminal charges against Fed Chair Jerome Powell regarding renovation costs and testimony. Powell has dismissed the threats as political pressure. Investors are now shifting focus to Tuesday’s US CPI release, where core inflation is expected to rise to 2.7%.
Technical View: USD/INR Hovers in Tight Range Near 90.50
Daily Chart Analysis: Bullish Bias Intact Above 20-EMA The USD/INR pair is trading slightly lower at 90.4665 but maintains a short-term bullish bias by holding above the rising 20-day Exponential Moving Average (EMA) at 90.2578. The 14-day Relative Strength Index (RSI) stands at a neutral 56, indicating steady momentum with ample room for upside before hitting overbought territory.
