- USD/INR breaks above 90 as the rupee crashes to a record low. Dollar strength, outflows, and RBI risks shape the December outlook.
USD/INR surged past the 90 mark for the first time on record on Wednesday, with the rupee weakening to a fresh all-time low as dollar demand remained strong across global markets. The pair touched 90.24 during the session before easing slightly, marking a continuation of the multi-month trend driven by firm US yields and persistent foreign outflows.
According to Reuters, the dollar index has climbed steadily this week as investors reassess the Federal Reserve’s path for interest rates. Importers and corporates continued accumulating dollars, putting extra pressure on the rupee.
From my perspective, the magnitude of USD/INR’s breakout is less about domestic weakness and more about relative strength in the dollar. When global risk sentiment is cautious and US yields stay elevated, the rupee tends to absorb the shock quickly.
USD/INR Chart Analysis: Rupee Slides to Fresh Record Lows
The monthly USD/INR chart shows the pair trading near 90.14, with a clean breakout above the upper Bollinger Band and no immediate resistance overhead. The past five months of candles reflect a steady upward climb, with the breakout accelerating from the 87 to 90 region.
The nearest support now sits between 88.50 and 89.20. If the pair sustains above 90, traders may start pricing in a push toward 92, although such moves typically attract RBI intervention.
The structure remains strongly bullish, but it is also stretched, and the lack of consolidation suggests the pair could see brief pullbacks if the RBI steps in or if US data weakens.
I beleive that USD/INR is nearing the stage where policymakers may try to slow the pace, even if the long-term trend stays intact.
Why Is USD/INR Surging and What Traders Are Watching Now?
USD/INR’s breakout above 90 has forced traders to refocus on the widening gap between US and Indian interest rate expectations. The stronger dollar, supported by resilient US economic data, has kept upward pressure on the pair, while foreign outflows and rising importer demand have added to rupee weakness.
According to Mint, several large corporates have accelerated dollar buying this week, contributing to the sharp move. I think this rally is driven far more by global dollar strength than by domestic deterioration, and the next few sessions will likely revolve around how much volatility the RBI is willing to tolerate at fresh record lows.
My own outlook is that any continued climb above 90 will likely be more measured, not vertical. When a currency pair hits new all-time highs, the next few sessions tend to be choppy as markets look for equilibrium.
USD/INR Outlook
If the dollar rally slows, USD/INR could drift back toward the 88.50 zone. But if US yields strengthen again, the pair may attempt fresh highs above 91.
My view is that volatility will stay elevated this month, and traders should be prepared for sudden reversals on data surprises.
Because the US dollar strengthened on firm yields and the rupee faced heavy importer demand and foreign outflows.
If the dollar stays strong and US data beats expectations, the pair may push higher, but RBI intervention could slow the pace.
A recovery is possible if the dollar index cools, US yields dip, or foreign inflows return to Indian markets.
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