USD/INR hits record highs amid consistent FIIs outflow
|- The Indian Rupee falls to record lows at 92.00 against the US Dollar.
- Consistent outflow of foreign funds from the Indian stock market has weakened the Indian Rupee.
- US-EU disputes over Greenland have weighed on the appeal of US assets.
The Indian Rupee (INR) plunges to record lows against the US Dollar (USD) on Wednesday. The USD/INR rallies to near 92.00 as the Indian Rupee faces intense selling pressure due to consistent outflow of foreign funds from the Indian stock market and the risk-off market mood amid tensions between the United States (US) and the European Union (EU) over Greenland.
Foreign Institutional Investors (FIIs) are consistently dumping their stake in the Indian stock market due to the absence of a trade deal announcement between the US and India, keeping demand for US Dollars sustained among Indian importers. So far in January, FIIs have remained net sellers in 12 out of 13 trading days and have offloaded their stake worth Rs. 32,253.55 crore.
Consistent outflow of overseas funds from the Indian equity market is weighing heavily on Indian bourses. Nifty50 is down almost 4.3% to near 25,250 from its highest level of 26,373 recorded on January 5.
Trade tensions between the US and India were caused by the imposition of 25% punitive tariffs in mid 2025 by Washington on imports from New Delhi for buying Oil from Russia.
Going forward, the major trigger for the Indian Rupee will be the announcement of the fiscal budget for the Financial Year (FY) 2026-2027 on February 1.
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 | -0.03% | -0.04% | -0.03% | -0.01% | -0.16% | 0.52% | 0.07% | |
| EUR | 0.03% | -0.01% | 0.00% | 0.02% | -0.13% | 0.54% | 0.11% | |
| GBP | 0.04% | 0.01% | 0.00% | 0.04% | -0.12% | 0.57% | 0.11% | |
| JPY | 0.03% | 0.00% | 0.00% | 0.03% | -0.12% | 0.59% | 0.10% | |
| CAD | 0.00% | -0.02% | -0.04% | -0.03% | -0.15% | 0.55% | 0.07% | |
| AUD | 0.16% | 0.13% | 0.12% | 0.12% | 0.15% | 0.70% | 0.23% | |
| INR | -0.52% | -0.54% | -0.57% | -0.59% | -0.55% | -0.70% | -0.44% | |
| CHF | -0.07% | -0.11% | -0.11% | -0.10% | -0.07% | -0.23% | 0.44% |
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).
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- The Indian Rupee underperforms the US Dollar, even as the latter has been battered heavily due to ongoing tensions between the US and the EU. At the time of writing, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, trades vulnerably near Tuesday’s closing price around 98.50.
- The dispute between the world’s largest economies over the future of Greenland has also diminished the appeal of US assets. US markets were down almost 2% on Tuesday after an extended weekend.
- US-EU relations have been impacted significantly as President Donald Trump has imposed 10% tariffs on several members of the old continent and the United Kingdom (UK) in retaliation for opposing Washington’s plans to hold Greenland’s entitlement.
- In response, several nations across the globe have criticized Trump’s tariff tactic, warning that it could impact world peace. French President Emmanuel Macron of France has strongly condemned Trump’s use of tariffs for blackmailing the continent to stop opposing Greenland’s purchase by Washington in his speech at the World Economic Forum (WEF) in Davos on Tuesday.
- “Endless accumulation of new tariffs was unacceptable, particularly when used as leverage against territorial sovereignty,” Macron said, The New York Times (NYT) reported.
- Meanwhile, market experts have warned that US assets could see further weakness as strained US-EU relations could weigh on exports from the nation, given that US relations are already fragile with other large economies, such as India, China, and Russia.
- On the domestic front, US Treasury Secretary Scott Bessent announced on Tuesday at the WEF that the White House could announce the name of the new Federal Reserve (Fed) Chairman as early as next week, and there are four candidates for the position presently.
Technical Analysis: USD/INR hits record highs at 92.00
USD/INR soars to near 92. The 20-day Exponential Moving Average (EMA) at 90.60 rises and supports the advance, with price holding above this dynamic base.
The 14-day Relative Strength Index (RSI) at 73.15 (overbought) confirms stretched momentum that could curb immediate follow-through. Initial support sits at the rising EMA, and consolidation above this gauge would help stabilize the short-term trend.
With the EMA sloping higher, the path of least resistance remains to the upside, and dips toward the average would be treated as a retest of support. A moderation of RSI back below 70 would signal a healthy momentum reset without undermining the bullish bias. Overall, the setup favors continuation while the pair holds above the rising EMA; a clear break below that gauge would open room for a deeper pullback.
(The technical analysis of this story was written with the help of an AI tool.)
Risk sentiment FAQs
In the world of financial jargon the two widely used terms “risk-on” and “risk off'' refer to the level of risk that investors are willing to stomach during the period referenced. In a “risk-on” market, investors are optimistic about the future and more willing to buy risky assets. In a “risk-off” market investors start to ‘play it safe’ because they are worried about the future, and therefore buy less risky assets that are more certain of bringing a return, even if it is relatively modest.
Typically, during periods of “risk-on”, stock markets will rise, most commodities – except Gold – will also gain in value, since they benefit from a positive growth outlook. The currencies of nations that are heavy commodity exporters strengthen because of increased demand, and Cryptocurrencies rise. In a “risk-off” market, Bonds go up – especially major government Bonds – Gold shines, and safe-haven currencies such as the Japanese Yen, Swiss Franc and US Dollar all benefit.
The Australian Dollar (AUD), the Canadian Dollar (CAD), the New Zealand Dollar (NZD) and minor FX like the Ruble (RUB) and the South African Rand (ZAR), all tend to rise in markets that are “risk-on”. This is because the economies of these currencies are heavily reliant on commodity exports for growth, and commodities tend to rise in price during risk-on periods. This is because investors foresee greater demand for raw materials in the future due to heightened economic activity.
The major currencies that tend to rise during periods of “risk-off” are the US Dollar (USD), the Japanese Yen (JPY) and the Swiss Franc (CHF). The US Dollar, because it is the world’s reserve currency, and because in times of crisis investors buy US government debt, which is seen as safe because the largest economy in the world is unlikely to default. The Yen, from increased demand for Japanese government bonds, because a high proportion are held by domestic investors who are unlikely to dump them – even in a crisis. The Swiss Franc, because strict Swiss banking laws offer investors enhanced capital protection.
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