The Indian Rupee (INR) gives up early gains and rises against the US Dollar (USD) during afternoon trading hours in India on Wednesday. The USD/INR pair rose near 90.25, even as the US dollar fell, with investors turning cautious ahead of the Federal Reserve’s monetary policy announcement at 19:00 GMT.
At the time of writing, the US Dollar Index (DXY), which measures the value of the dollar against six major currencies, is trading 0.1% lower to near 99.10.
The CME FedWatch tool shows that the probability of the Fed cutting rates by 25 basis points to 3.50%-3.75% at its December policy meeting is 87.6%. This will be the third interest rate cut by the Fed in a row. The Fed’s strong dovish outlook is driven by weak labor market conditions in the United States.
Recently, a large number of Federal Open Market Committee (FOMC) members also supported the need for further policy expansion amid downside employment risks. In late November, New York Fed President John Williams said there was room for further interest rate cuts in the near term as policy remained modestly restrictive, while warning that “economic growth has slowed and the labor market has gradually cooled.”
Since the Fed is almost certain to cut borrowing rates further, the main driver of the US dollar outlook will be the Fed’s guidance on interest rates. Investors want to know whether the Fed will announce a pause in its ongoing monetary easing campaign or will lean toward a data-driven approach.
Financial market participants will also focus on the Fed’s bullet chart, which shows where policymakers collectively see the federal funds rate heading in the near to long term.
Daily summary of market drivers: Indian rupee declines as US-India trade talks begin
- The Indian rupee falls against the US dollar as the two-day trade talks between the US and India begin on Wednesday. Deputy US Trade Representative Rick Switzer was scheduled to visit India on December 10-11, while the Indian Foreign Ministry described Switzer’s meetings as a “familiarization” trip, Reuters reported.
- Officials from India will look to push for lower tariffs on exports to the United States, which currently stand at 50%, one of the highest among Washington’s trading partners.
- Signals from the meeting that the United States and India have made progress toward reaching a consensus will be favorable for the Indian rupee, which has lost significant interest from foreign investors due to uncertainty over the trade deal.
- So far in December, foreign institutional investors (FIIs) have been shown to be net sellers on all trading days, offloading stake worth Rs. 14,819.29 crores. FIIs also remained net sellers in the past five months.
- Domestically, investors will focus on November retail CPI data, which will be released on Friday. According to a Reuters poll conducted from December 4 to 8, India’s retail inflation rate grew at an annual pace of 0.7%, faster than 0.25% in October.
The table below shows the percentage change in the Indian Rupee (INR) against the major currencies listed today. The Indian rupee was the weakest against the Australian dollar.
| US dollars | euro | GBP | JPY | Canadian | Australian dollar | Indian rupee | Swiss franc | |
|---|---|---|---|---|---|---|---|---|
| US dollars | -0.12% | -0.10% | -0.03% | 0.03% | -0.14% | 0.08% | -0.14% | |
| euro | 0.12% | 0.02% | 0.07% | 0.15% | -0.03% | 0.22% | -0.02% | |
| GBP | 0.10% | -0.02% | 0.06% | 0.13% | -0.05% | 0.19% | -0.04% | |
| JPY | 0.03% | -0.07% | -0.06% | 0.06% | -0.11% | 0.13% | -0.11% | |
| Canadian | -0.03% | -0.15% | -0.13% | -0.06% | -0.17% | 0.08% | -0.17% | |
| Australian dollar | 0.14% | 0.03% | 0.05% | 0.11% | 0.17% | 0.28% | 0.00% | |
| Indian rupee | -0.08% | -0.22% | -0.19% | -0.13% | -0.08% | -0.28% | -0.25% | |
| Swiss franc | 0.14% | 0.02% | 0.04% | 0.11% | 0.17% | -0.00% | 0.25% |
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).
Technical Analysis: USD/INR remains above the 20-day EMA
The USD/INR pair is trading flat near 90.20 in the European trading session on Wednesday. The upwardly sloping 20-day Exponential Moving Average (EMA) at 89.6463 confirms a steady uptrend, with the spot price holding above it.
The 14-day RSI is down at 62.00 from previous overbought readings, indicating strong but moderate momentum.
Trend strength will hold while the price remains above the 20-day EMA, where pullbacks can find support. A renewed push of momentum towards the 70.00 RSI range could extend gains, while a decline towards 50.00 could indicate consolidation. Buyers defending the 20-day EMA will keep the trajectory higher intact, while a close below it could open a deeper correction towards the November 13 high of 88.97.
(The technical analysis for this story was written with the help of an artificial intelligence tool.)
Economic indicator
Federal interest rate decision
the Federal Reserve The Federal Reserve deliberates on monetary policy and decides on interest rates at eight pre-scheduled meetings annually. It has two mandates: keeping the inflation rate at 2%, and maintaining full employment. Its main tool for achieving this end is setting interest rates – at which banks lend and banks lend to each other. If it decides to raise interest rates, the US dollar (USD) tends to strengthen because it attracts more foreign capital inflows. If they lower interest rates, they tend to weaken the US dollar while draining capital to countries that offer higher returns. If interest rates are left unchanged, attention turns to the tone of the FOMC statement, and whether it is hawkish (expecting interest rates to rise in the future), or dovish (expecting interest rates to fall in the future).
Read more.
Next release:
Wednesday 10 December 2025 at 19:00
repetition:
irregular
consensus:
3.75%
former:
4%
source:
Federal Reserve
