The Indian Rupee (INR) opened weaker against the US Dollar (USD) on Thursday, pushing USD/INR toward 88.80, as renewed USD strength dominated global currency markets. The Greenback advanced after the Federal Open Market Committee (FOMC) released the minutes from its October meeting, where policymakers cut rates by 25 basis points to 3.75%–4.00%.
The US Dollar Index (DXY) climbed back toward a five-month high near 100.40, reflecting broad-based USD buying ahead of the delayed US Nonfarm Payrolls (NFP) report.
Fed Officials Signal Caution on Further Rate Cuts
The FOMC minutes showed that several members were uneasy with the consecutive rate cuts, warning that continued easing could fuel inflation expectations and erode public confidence in the central bank’s commitment to restoring inflation to the 2% target.
With many officials leaning toward pausing additional rate cuts in December, markets have sharply reduced expectations for another move lower. According to the CME FedWatch Tool, the probability of a 25 bps cut in December has slipped to 32.8%, down from 50.1% a day before the minutes were released.
INR Under Pressure Amid Trade Deal Uncertainty and RBI Rate-Cut Bets
The Rupee also weakened as uncertainty persisted around the delayed US–India trade agreement. Negotiators have hinted that discussions are in advanced stages, but the absence of a formal announcement keeps traders cautious.
Growing expectations that the Reserve Bank of India (RBI) will cut interest rates in December further weighs on the currency. Softer inflation data has bolstered the case for easing — retail inflation fell to 0.25% YoY in October, marking the second consecutive month below the RBI’s 2%–6% tolerance band. The decline was attributed to easing food prices and tax cuts implemented earlier in the year.
Markets now shift focus to:
- India’s flash HSBC PMI for November (Friday)
- US NFP for September (Thursday, 13:30 GMT), a key driver of Fed policy expectations
Economists expect:
- 50K new US jobs (vs. 22K in August)
- Unemployment Rate: 4.3%
- Average Hourly Earnings: +0.3% MoM / +3.7% YoY
A softer-than-expected NFP print could pressure the USD, whereas stronger data may reinforce its latest rally.
Technical Outlook: USD/INR Breaks Losing Streak
USD/INR has rebounded toward 88.80, ending its four-day decline. Buyers returned after the pair dipped below the 20-day Exponential Moving Average (EMA) at 88.70.
- RSI (14-day) has bounced toward 60.00; a sustained break above this level may signal renewed bullish momentum.
- Key support: 87.07 (low from August 21)
- Major resistance: 89.12 (record high)