USD to INR Forecast for 2023, 2025, and 2030

The USD/INR price pulled back from its highest point in 2022 as the focus shifted to the potential Fed pivot this year. It dropped as the US dollar index continued plunging to the lowest level in months. The USD to INR exchange rate plunged to a low of 80.85 on January 20th, the lowest level since November 14.

Indian Rupee started the year strong in terms of the dollar as the DXY Index fell to its 6-month low of 100.8. However, the dollar strength index rebounded strongly from these lows once the January CPI data got released. This weakened the global currencies in terms of their dollar value. USD/INR was also got affected and started to surge once again.

USDINR To be Affected By More Rate Hikes in 2023

The January PCE inflation data came as a shock to many analysts. The Fed’s preferred inflation gauge showed an uptick in inflation despite all the expectations of decreasing inflation. The Personal Consumption Expenditures index (PCE) for January came at 5.4%. This was an increase from 5.3% in December and a big surprise when compared to the expected figure of 4.9%.

The core PCE inflation also came out higher than expected and remained at 4.7% in January 2023. The same figure stood at 4.6% in December.

However, after an increase in inflation in the first month of the year, the February CPI data showed decreasing inflation. The February CPI report, which was released on 14th March, met expectations as the YoY inflation came remained at 6%. The core CPI inflation also came in line with the expectations of 5.5% on a YoY basis.

USD to INR Price History

USD to INR trading dates back to 1973 when the pair was floated in the forex market at an opening price of $1 to 7.98 rupees. By late 1983, the currency pair rose past the psychological level of 10 rupees to the US Dollar. Between then and April 2002, it rallied by 376.41% to 48.76 rupees.

After retracing to 39.9 rupees in November 2007, the USD/INR has been on an uptrend since then. The pair surged to an all-time high of 77.887 rupees in 2022. Before attaining its all-time highs, the USD/INR tasted the 76.45 price mark in March 2020, just as the coronavirus pandemic was sweeping through the world.

The currency pair pulled back slightly and did not make a return to new highs until 2022, when rising inflation forced the Federal Reserve to start raising interest rates. The pair peaked at 83.28 in Oct 2022 but had a sharp correction afterward.

USDINR Monthly Chart
USDINR Historical Chart

USD/INR Remains Strong Amid Rising DXY

The US Dollar to Indian Rupee exchange rate often shows a very strong correlation to the DXY index chart. The following chart shows a strong rebound in the dollar strength index since the start of 2023. This has caused a surge in USD/INR as the investors prefer to hold the greenback over any other foreign currency.

DXY chart
DXY Index Chart

A sudden Fed pivot could trigger a waterfall in DXY. That’s why many analysts are looking toward Jerome Powell’s next move. The March 2023 FOMC is likely to result in another significant rate hike which will further strengthen the dollar against other global currencies.

Second, the USD/INR price has retreated because of the comeback of emerging market currencies. In the past few days, we have seen some EM currencies, like the South African rand, rebound as investors have embraced a risk-on sentiment.

RBI is increasing interest rates to strengthen the Indian Rupee. However, the oil imports and the slowing Indian economy is still weakening the Rupee. On February 8, RBI announced another rate hike of 25 basis points. This put the interest at 6.5%, which is likely to slow the economy even more in the coming months.

What to Expect from RBI

Due to the current geopolitical scenario, many countries are now exploring more options for international trade. As a result, Indian Rupee has also appeared as a viable option for many countries. More recently, the Reserve Bank of India has given a go-ahead to the banks of 18 nations to trade in Indian Rupee. The move can increase the demand for INR and decrease the selling pressure.

When Will Fed Pivot?

The January CPI data has shown a decrease in inflation but came out below expectations. Analysts are now expecting inflation to remain sticky in the near future. Global equities have also been in an uptrend since the start of the year, along with strong economic data. Therefore, I expect US Fed to remain hawkish in 2023 to control inflations.

It will be very difficult for USD to INR to show strength this year amid high inflation in the United States. Analysts expect the interest rates to remain high throughout 2023. Even if Fed pauses in the next half of the year, it can still keep the rates high for a long duration if inflation remains high.

What will be USD to INR Rate in 2025?

Long Forecast’s USD to INR forecast 2025 suggests the start of the year around 79.79 Rupees. It expects the currency pair to average at 80 Rupees by mid-year before rallying further to 86.97 Rupees by the end of the year. The prices can go much higher if the global economy enters a prolonged recession. after the ongoing deflationary measures.

USD to INR forecast
USD to INR forecast

It is important to note that the targets for April 2022 have already been met, while the price pattern on the daily chart indicates that there is a high potential for the May 2022 price target of 79.19 to be met in June. As it is, this makes the USD to INR forecast 2025 above quite viable, albeit with some minor differentials. It is crucial to conduct your own individual research.

USD to INR Forecast 2030

A feasible USD to INR forecast for 2030 is informed by the economic health of India and the US, Fed and RBI’s monetary policy, and the demand for the US dollar as a safe haven. Hence, a strong dollar will likely push USD to INR to a new record high, depending on the key drivers.

However, as an emerging market, India’s currency has the potential to strengthen further in the coming years. From that perspective, USD to INR forecast 2030 will be for the pair to remain within a range for several years.

Technical Forecast: USD/INR

As shown in the chart below, the USD/INR pair has formed an ascending triangle pattern on its chart. These patterns often result in an upward breakout. The chart depicts that the price is getting strong support from the bottom of the wedge and strong resistance from its top. In case of a downward break, the price can get some support from the 80.92 level, where lies the 200-day moving average.

If the DXY index keeps rising, then an upward break is more likely. This will send the US Dollar to Indian Rupee exchange rate to new all-time highs in 2023. The major factor affecting the price action of the pair will be the upcoming rate hikes by the US Federal Reserve. A sudden Fed pivot can send DXY tumbling, hence weakening the dollar. This can give some strength to other global currencies.

USD/INR: Daily Chart

USD/INR chart
USD/INR Chart – Prepared on Tradngview

How to trade USDINR

To trade USDINR, one needs to open an account with a reputable forex broker. When researching the best broker, it is helpful to consider their spreads, commissions, and other fees. It is also possible to trade the currency’s derivatives in the form of USDINR futures.