The Indian rupee slipped to 90.44 per US dollar on Friday, marking a third day of loss as a powerful dollar and weak foreign inflows weigh on the currency.
Current Movement
In early trading the rupee opened around 90.37 against the dollar but quickly fell to 90.44, about 10 paise lower than the previous close. The drop follows an 11‑paise fall on Wednesday and a 6‑paise dip on Tuesday.
Why the Rupee Is Under Pressure
1. Strong US dollar
US labor data showed lower jobless claims, suggesting the US economy is still strong. This kept confidence that the Federal Reserve will not cut rates soon, supporting a firmer dollar.
2. Hawkish Fed comments
Fed officials stressed that any rate cuts will only happen if inflation consistently moves toward the 2% target, adding more upward pressure on the dollar.
3. India’s trade deficit
December’s merchandise trade gap widened slightly to $25.04 billion. A larger deficit means more dollars leaving the country, adding strain to the rupee when capital inflows are low.
4. Delay in India‑US trade deal
Negotiations for a major India‑US trade agreement are ongoing but no clear timeline has been set. Without progress, the rupee misses a potential boost from improved investor confidence.
5. Foreign Portfolio Investor (FPI) outflows
Since the start of the year, FPIs have sold Indian equities worth about ₹19,015 crore in January alone. Continued selling keeps the rupee vulnerable to any dollar strength.
Analyst Outlook
- Resistance: 90.30‑90.50 area. A clear break above could push the pair toward 91.20‑91.50.
- Support: Around 89.50.
- CR Forex’s Amit Pabari says the rupee is walking a “narrow bridge” supported by the RBI but tested by the dollar.
- Geojit’s VK Vijayakumar expects the rupee to stay roughly between 88 and 91 during the first half of 2026.
- Mehta Equities’ Rahul Kalantri predicts short‑term trading in a 89.20‑91.40 range amid dollar volatility and geopolitical tensions.
Key Takeaways
- The rupee’s recent slide reflects a strong US dollar, a modestly larger trade deficit, and ongoing foreign outflows.
- Improvement in the India‑US trade talks could help reverse the trend, but no immediate impact is expected.
- Technical levels suggest the rupee could test 91.00 if the dollar keeps rising, while 89.50 offers near‑term support.
Remember, these insights are for information only and not a prediction. Do your own research or consult a certified advisor before making any investment decisions.