The Indian Rupee (INR) opens on a flat note against the US Dollar (USD) near its over two-week high around 88.95 at the start of the new month on Monday. The USD/INR pair aims to extend its six-day winning streak as the Indian Rupee (INR) continues to underperform due to Foreign Institutional Investors (FIIs) selling in the Indian stock market, and the US Dollar (USD) extends its rally amid escalating doubts over further interest rate cuts by the Federal Reserve (Fed) for the December policy meeting.
With the foreign outflow of Rs. 2,346.89 crores worth of shares from the Indian equity market in October, FIIs have turned out to be net sellers for the fourth month in a row. However, the pace of FIIs selling appears to have slowed down significantly. The amount of stake pared by overseas investors in the Indian equity market in October is significantly lower than the average selling of Rs. 43,290.32 crores seen in the July-September period.
FIIs have been keeping a distance from the Indian stock market amid the delay in a breakthrough in trade talks between the United States (US) and India. Negotiators from both nations have been signaling that they are close to striking a trade agreement, but have not yet reached a consensus.
Meanwhile, a report from Reuters has shown that the odds of the Reserve Bank of India (RBI) intervening in the currency market are high as the USD/INR is approaching its all-time high of 89.12 posted in late September.
The table below shows the percentage change of Indian Rupee (INR) against listed major currencies today. Indian Rupee was the weakest against the Australian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | INR | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.02% | 0.07% | 0.14% | 0.02% | -0.18% | 0.02% | -0.05% | |
| EUR | -0.02% | 0.07% | 0.09% | -0.00% | -0.20% | 0.01% | -0.05% | |
| GBP | -0.07% | -0.07% | 0.06% | -0.07% | -0.24% | -0.05% | -0.11% | |
| JPY | -0.14% | -0.09% | -0.06% | -0.12% | -0.29% | -0.09% | -0.15% | |
| CAD | -0.02% | 0.00% | 0.07% | 0.12% | -0.22% | 0.03% | -0.04% | |
| AUD | 0.18% | 0.20% | 0.24% | 0.29% | 0.22% | 0.20% | 0.17% | |
| INR | -0.02% | -0.01% | 0.05% | 0.09% | -0.03% | -0.20% | -0.06% | |
| CHF | 0.05% | 0.05% | 0.11% | 0.15% | 0.04% | -0.17% | 0.06% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick 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 digest market movers: Fed officials express concerns over upside inflation risks
- The US Dollar has been outperforming since the monetary policy announcement by the Federal Reserve (Fed) on Wednesday. During the press time, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, trades firmly near a fresh three-month high around 99.85.
- In Wednesday’s monetary policy announcement, the Fed reduced interest rates for the second straight meeting by 25 basis points (bps) to 3.75%-4.00%, but Chair Jerome Powell argued against cutting interest rates again in the December meeting.
- Fed’s Powell stated that the December cut is “far from assured”. Powell clarified that there were “strongly different views” in the meeting, and the takeaway is that “we haven’t made a decision about December”, Bloomberg reported.
- Since then, traders have trimmed bets supporting more interest rate cuts by the Fed for the December policy meeting. According to the CME FedWatch tool, the probability of the Fed to cut interest rates by 25 basis points (bps) to 3.50%-3.75% in the December meeting has eased to 69.3% from 91.7% seen a week ago.
- Meanwhile, a few Federal Open Market Committee (FOMC) members have also argued against reducing interest rates further, citing that inflationary pressures are well above the central bank’s 2% target.
- “Given the move that we just made, I think we’re right around my estimate of neutral: I think we’re barely restrictive if at all,” Cleveland Fed President Beth Hammack said on Friday. He added, “I do think we need to maintain some amount of restriction to help bring inflation back down to target,” Reuters reported.
- On the contrary, Fed Governor Christopher Waller has stressed on reducing interest rates further, in an interview on Fox Business Network, citing labor market risks. “The biggest concern we have right now is the labor market, while expressing confidence that price pressures are going to come back down.”
Technical Analysis: USD/INR aims to revisit all-time high above 89.00
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USD/INR trades firmly near over two-week high around 88.95 at the start of the week. The near-term trend of the pair remains bullish as it trades above the 20-day Exponential Moving Average (EMA), which trades around 88.54.
The 14-day Relative Strength Index (RSI) breaks above 60.00. A fresh bullish momentum would emerge if the RSI sustains above that level.
Looking down, the August 21 low of 87.07 will act as key support for the pair. On the upside, the all-time high of 89.12 will be a key barrier.
Economic Indicator
Fed Interest Rate Decision
The Federal Reserve (Fed) deliberates on monetary policy and makes a decision on interest rates at eight pre-scheduled meetings per year. It has two mandates: to keep inflation at 2%, and to maintain full employment. Its main tool for achieving this is by setting interest rates – both at which it lends to banks and banks lend to each other. If it decides to hike rates, the US Dollar (USD) tends to strengthen as it attracts more foreign capital inflows. If it cuts rates, it tends to weaken the USD as capital drains out to countries offering higher returns. If rates are left unchanged, attention turns to the tone of the Federal Open Market Committee (FOMC) statement, and whether it is hawkish (expectant of higher future interest rates), or dovish (expectant of lower future rates).
Last release: Wed Oct 29, 2025 18:00
Frequency: Irregular
Actual: 4%
Consensus: 4%
Previous: 4.25%
Source: Federal Reserve