- Learn more about the main factors impact the pricing of the USD/INR and what is the technical levels for the currency pair
The indian rupee, after reaching a two-week high in the previous session, is now trading almost flat. However, the weak US dollar supports Asian currencies in gaining strength and could also provide support to the Indian currency. The decline in crude oil prices may also contribute to supporting the indian currency because India is the world’s third-largest oil consumer, so lower oil prices will have a positive impact on the INR.
Investors are waiting for the interest rate decision by the Reserve Bank of India, while they anticipate an interest rate cut in June. Additionally, the US consumer confidence report, the durable goods orders, and the Dallas Fed manufacturing index are due later on Tuesday. The market is watching for the FOMC minutes that will be released on Wednesday.
The Key Drivers for the USD/INR:
- The CME watch tool shows that the probability of cutting interest rates in June’s meeting is only 5.6% for the target rate 375-400 basis point range.
- The monetary policy of the RBI, the market anticipates that they will cut interest rates by 25 basis points in June.
The Technical Outlook for The USD/INR:
The bearish outlook remains in place for the USD/INR as the price is now trading below the resistance level of the Bollinger bands on the daily timeframe. The first support level, which is too near to the current level of trading, is 85.04; any clear break through this level will open the way to reach the second support level at 84.53 and then 84.15.
On the bullish side, the USD/INR is now trading under the pressure of a strong resistance level at 85.55. So any sustained breakout above this level could support the USD/INR to reach higher levels towards 86.02 and then 86.59. USD/INR Forecast for 2025, 2027, and 2030
What are the factors must watch by traders while trading USD/INR?
The USD/INR is sensitive to external factors such as:
- Crude oil prices because India is highly dependent on imported oil.
- US-Dollar value.
- The level of foreign investment.
The direct factors include the Reserve Bank of India’s intervention to stabilize the exchange rate as well as the interest rate.
USD/INR Forecast for End of Day: US Data in Focus
Market analysts anticipate the USD/INR pair will likely trade within a narrow range for the remainder of today, Tuesday, May 27, 2025. The Rupee is expected to fluctuate between support levels around 84.75-84.80 and resistance levels near 85.30-85.50. The ultimate direction for the day will heavily depend on the upcoming US Consumer Confidence and Durable Goods Orders data, which could influence the Dollar's strength. Some experts suggest that any upward move in the pair might present a selling opportunity, considering factors like month-end dollar demand and capital outflows.
Rupee Slips in Early Trade Amid Outflows, Eyes US Data
The Indian Rupee (INR) opened marginally weaker today, Tuesday, May 27, 2025, against the US Dollar (USD), primarily influenced by anticipated outflows related to MSCI index rebalancing. Month-end dollar demand from importers is also weighing on the currency. Despite these pressures, a softer US Dollar Index and subdued crude oil prices are offering some support to the Rupee. Market participants are now keenly focused on upcoming US economic data, including the Conference Board's Consumer Confidence, Durable Goods Orders, and the Dallas Fed Manufacturing Index, which could impact the pair. The Minutes from the Federal Open Market Committee (FOMC) are also highly anticipated.
Indian Rupee Navigates Global and Domestic Pressures
The Indian Rupee (INR) is weakening due to month-end US Dollar demand and expectations of lower interest rates from the Reserve Bank of India (RBI). However, a drop in crude oil prices could provide some support. Traders are anticipating key US economic data, including Consumer Confidence and Durable Goods Orders, along with Federal Open Market Committee (FOMC) Minutes. The Rupee's value is sensitive to external factors like crude oil prices, the US Dollar's strength, and foreign investment. The RBI actively intervenes in currency markets to stabilize the exchange rate and uses interest rates to manage inflation. Macroeconomic factors like inflation, interest rates, GDP, and trade balance all influence the Rupee.