USD/INR surges amid consistent FIIs selling in Indian equity market
|- The Indian Rupee remains on the back foot against the US Dollar at the start of the week.
- Consistent outflow of foreign funds from the Indian stock market keeps the INR on its back foot.
- The US Dollar has come under pressure due to the EU’s opposition on US desire to purchase Greenland.
The Indian Rupee (INR) demonstrates weakness against the US Dollar (USD) at the start of the week. The USD/INR pair jumps to near the all-time high of 91.55 as the Indian currency continues to underperform its peers. The Indian Rupee faces severe selling pressure as domestic equities struggle to lure foreign investors amid the absence of a decisive breakthrough in trade discussions between the United States (US) and India.
So far in January, Foreign Institutional Investors (FIIs) have remained net sellers on 10 out of 11 trading days, offloading a stake worth Rs. 26,052.40 crore. FIIs also remained net sellers in four out of 12 months in 2025.
Trade frictions between the US and India stemmed from Washington raising tariffs on imports from New Delhi to 50%, one of the highest among all its trading partners for buying oil from Russia.
The next major trigger for the Indian Rupee will be the fiscal budget announcement by Finance Minister (FM) Nirmala Sitharaman on February 1.
According to a report from Jefferies, the Indian government is expected to target a fiscal deficit of about 4.2% of GDP in the Financial Year (FY) 2027. The capital market firm expects the fiscal deficit could be increased to 4.4% if the administration prioritizes near-term growth. The firm also expects the Indian government to raise defense spending and to roll out long-delayed central government pay hikes.
The table below shows the percentage change of Indian Rupee (INR) against listed major currencies today. Indian Rupee was the weakest against the Swiss Franc.
| USD | EUR | GBP | JPY | CAD | AUD | INR | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.24% | -0.13% | -0.16% | -0.16% | -0.16% | 0.25% | -0.55% | |
| EUR | 0.24% | 0.10% | 0.07% | 0.07% | 0.08% | 0.50% | -0.29% | |
| GBP | 0.13% | -0.10% | 0.00% | -0.02% | -0.02% | 0.39% | -0.39% | |
| JPY | 0.16% | -0.07% | 0.00% | -0.02% | -0.01% | 0.40% | -0.38% | |
| CAD | 0.16% | -0.07% | 0.02% | 0.02% | 0.00% | 0.43% | -0.37% | |
| AUD | 0.16% | -0.08% | 0.02% | 0.00% | -0.01% | 0.42% | -0.37% | |
| INR | -0.25% | -0.50% | -0.39% | -0.40% | -0.43% | -0.42% | -0.79% | |
| CHF | 0.55% | 0.29% | 0.39% | 0.38% | 0.37% | 0.37% | 0.79% |
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: US-EU disputes push US Dollar lower
- The Indian Rupee flattens against the US Dollar in the opening session on Monday, while the latter underperforms against its other major peers. At the time of writing, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, trades 0.2% lower to near 99.15.
- The US Dollar has come under pressure due to fresh trade tensions between the US and the Eurozone over Washington’s desire to purchase and gain full control of Greenland, citing security issues.
- Over the weekend, US President Donald Trump announced a 10% tariff on goods from European Union (EU) members Denmark, Sweden, France, Germany, the Netherlands, and Finland, along with Britain and Norway, starting from February 1, until Washington is allowed to buy Greenland.
- In response, EU members have condemned the US plans for the complete and total purchase of Greenland, and have threatened “united and coordinated” countermeasures. The team of France's President Emmanuel Macron said that the president will ask the EU to activate its powerful "anti-coercion instrument" if the US imposes additional tariffs in the standoff over Greenland, France 24 reported.
- On the domestic front, a dovish commentary from Federal Reserve (Fed) Vice Chair for Supervision Michelle Bowman on the monetary policy outlook has also weighed on the US Dollar. Bowman argued in a speech on Friday that the Fed should be prepared to cut interest rates further amid fragile labor market conditions. “Risk to Fed's mandates is asymmetric, with job risks outweighing inflation concerns,” Bowman said, and added, “Given risks, Fed should not signal a pause in rate-cutting campaign.”
- According to the CME FedWatch tool, the Fed is almost certain to hold interest rates steady in the range of 3.50%-3.75% in the January policy meeting.
- On the economic front, investors will focus on the preliminary India-US private Purchasing Managers’ Index (PMI) data for January, which will be released on Friday.
Technical Analysis: USD/INR jumps to near all-time high around 91.55
USD/INR soars to near the all-time high of 91.55 at the time of writing. The 20-day Exponential Moving Average (EMA) is rising and continues to underpin the advance. Price action holds above this dynamic gauge, keeping pullbacks contained.
The 14-day Relative Strength Index (RSI) is at 68.85 (bullish), demonstrating strong momentum, with no overbought conditions. Initial support sits at the 50-day EMA at 89.9134.
As long as the pair holds above the average, topside extension remains favored, while a close below it would soften the tone and expose a deeper retracement.
Economic Indicator
S&P Global Composite PMI
The S&P Global Composite Purchasing Managers Index (PMI), released on a monthly basis, is a leading indicator gauging US private-business activity in the manufacturing and services sector. The data is derived from surveys to senior executives. Each response is weighted according to the size of the company and its contribution to total manufacturing or services output accounted for by the sub-sector to which that company belongs. Survey responses reflect the change, if any, in the current month compared to the previous month and can anticipate changing trends in official data series such as Gross Domestic Product (GDP), industrial production, employment and inflation. The index varies between 0 and 100, with levels of 50.0 signaling no change over the previous month. A reading above 50 indicates that the private economy is generally expanding, a bullish sign for the US Dollar (USD). Meanwhile, a reading below 50 signals that activity is generally declining, which is seen as bearish for USD.
Read more.Next release: Fri Jan 23, 2026 14:45 (Prel)
Frequency: Monthly
Consensus: -
Previous: 52.7
Source: S&P Global
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