The Indian Rupee (INR) rose against the US Dollar (USD) during afternoon trading hours in India on Tuesday. The USD/INR pair fell to around 90.08, with trading volume remaining compressed in the latter part of the year. However, the near-term trend for the pair remains bullish due to the continuous inflow of foreign funds from the Indian stock market.
On Monday, foreign institutional investors (FIIs) offloaded their stake worth Rs. 2,759.89 crore in Indian stock market. So far this month, FIIs have remained net sellers in 17 out of 20 trading days and trimmed their stake by Rs. Rs 26,908.22 crore.
Foreign investors have been staying away from the Indian secondary market amid the trade stalemate between the US and India. Negotiators from both countries have expressed several times that they are close to reaching a trade agreement, but have not yet announced it, due to which Washington is imposing 50% tariffs on imports from New Delhi, the highest among all its trading partners.
In Tuesday’s session, investors will focus on Trade Deficit – Reserve Bank of India (Q3), which will be published at 17:00 GMT. The data will show the change in the total amount of goods and services exported and imported from India.
The table below shows the percentage change in the Indian Rupee (INR) against the major currencies listed today. The Indian rupee was the strongest against the euro.
| US dollars | euro | GBP | JPY | Canadian | Australian dollar | Indian rupee | Swiss franc | |
|---|---|---|---|---|---|---|---|---|
| US dollars | 0.02% | -0.03% | -0.06% | -0.07% | -0.20% | -0.13% | 0.00% | |
| euro | -0.02% | -0.06% | -0.09% | -0.09% | -0.23% | -0.19% | -0.02% | |
| GBP | 0.03% | 0.06% | -0.02% | -0.04% | -0.17% | -0.10% | 0.02% | |
| JPY | 0.06% | 0.09% | 0.02% | -0.01% | -0.13% | -0.09% | 0.10% | |
| Canadian | 0.07% | 0.09% | 0.04% | 0.00% | -0.13% | -0.07% | 0.06% | |
| Australian dollar | 0.20% | 0.23% | 0.17% | 0.13% | 0.13% | 0.04% | 0.19% | |
| Indian rupee | 0.13% | 0.19% | 0.10% | 0.09% | 0.07% | -0.04% | 0.17% | |
| Swiss franc | -0.00% | 0.02% | -0.02% | -0.10% | -0.06% | -0.19% | -0.17% |
The heat map shows the percentage changes in major currencies versus each other. The base currency is chosen from the left column, while the counter currency is chosen from the top row. For example, if you select the Indian Rupee from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent INR (base)/USD (quote).
Daily Summary of Market Movers: The US dollar is trading calmly in the countdown to the FOMC minutes
- Another reason behind the sideways movement in the USD/INR pair is the stability of the US dollar ahead of the release of the Federal Open Market Committee (FOMC) minutes of the December meeting in the late New York session.
- At press time, the US Dollar Index (DXY), which tracks the value of the dollar against six major currencies, is trading flat around 98.00.
- Investors will pay close attention to the FOMC minutes for new signals on the 2026 monetary policy outlook.
- At the policy meeting, the Fed decided to cut interest rates by 25 basis points to 3.50%-3.75%. This was the third interest rate cut by the Fed in a row. Fed policymakers have indicated that monetary policy conditions need to ease further to support deteriorating labor market conditions.
- Following the policy results, San Francisco Fed President Mary Daly also stated that she favors interest rate cuts at the policy meeting, as the labor market has become softer, and added that policymakers cannot let the labor market falter.
- In the policy announcement, the Fed’s economic outlook report showed that policymakers collectively see the federal funds rate heading to 3.4% by the end of 2026, suggesting there will be only one rate cut throughout the entirety of next year.
- Contrary to the Fed’s forecast, the CME FedWatch tool shows that the Fed will cut borrowing rates by at least 50 basis points in 2026.
- Next year, the main event will be the White House’s announcement of the successor to Fed Chairman Jerome Powell. US President Donald Trump said on Monday that he intends to announce his choice for “the next president sometime in January.” Trump’s latest comments pointed to former Fed Chairman Kevin Warsh, White House economic adviser Kevin Hassett, and current Fed governors Christopher Waller and Michael Bowman as the top contenders to be the next Fed chair.
Technical Analysis: USD/INR remains near the 20-day EMA
The USD/INR pair is trading flat near the 90.30 level in the opening trading session on Tuesday. The 20-day EMA is rising at 90.20, with the price holding above it and maintaining a moderate upward slope. The 20-day EMA has been rising for several sessions, confirming steady demand.
The 14-day Relative Strength Index (RSI) at 54 (neutral) reflects balanced momentum after pulling back from previous overbought readings.
Price action continues to respect the bullish 20-day EMA, which acts as immediate support at 90.20. A sustained close above this average keeps the trend profile positive and could encourage further rally towards the all-time high at 91.55, while a break below it would tip the bias towards consolidation.
(The technical analysis for this story was written with the help of an artificial intelligence tool.)
Federal Reserve Bank Questions and Answers
Monetary policy in the United States is shaped by the Federal Reserve Bank (Fed). The Federal Reserve has two missions: achieving price stability and promoting full employment. The primary tool for achieving these goals is adjusting interest rates. When prices rise too quickly and inflation is above the Fed’s 2% target, it raises interest rates, which increases borrowing costs throughout the economy. This causes the US dollar (USD) to strengthen because it makes the United States a more attractive place for international investors to park their money. When inflation falls below 2% or when the unemployment rate is very high, the Fed may lower interest rates to encourage borrowing, which affects the dollar.
The Federal Reserve (Fed) holds eight policy meetings annually, where the Federal Open Market Committee (FOMC) assesses economic conditions and makes monetary policy decisions. The FOMC meeting is attended by twelve Fed officials – the seven members of the Board of Governors, the New York Fed president, and four of the remaining eleven regional Fed presidents, who serve one-year terms on a rotating basis.
In extreme cases, the Fed may resort to a policy called quantitative easing (QE). Quantitative easing is the process by which the Federal Reserve dramatically increases the flow of credit into a stuck financial system. It is a non-standard policy measure used during crises or when inflation is very low. It was the Fed’s weapon of choice during the Great Financial Crisis of 2008. It involves the Fed printing more dollars and using them to buy high-quality bonds from financial institutions. Quantitative easing usually weakens the US dollar.
Quantitative tightening (QT) is the reverse process of quantitative easing, where the Fed stops purchasing bonds from financial institutions and does not reinvest capital from bonds it holds outstanding, to purchase new bonds. This is usually positive for the value of the US dollar.


