USD/INR surrenders major early gains, remains broadly firm amid higher oil prices
- The Indian Rupee recovers significant early losses against the US Dollar after posting record lows of around 95.35.
- Oil prices hit a fresh over seven-week high as US President Trump vows to prolong the blockade on Iran.
- More Fed members call for a shift from easing bias.
The Indian Rupee (INR) claws back some of its early losses against the US Dollar (USD) during afternoon market hours in India on Thursday after plummeting to record lows. The USD/INR pair falls back to near 94.90 as the US Dollar turns upside down after posting a fresh all-time high at 95.35. The pair rallied in the opening as oil prices gained sharply, following remarks from United States (US) President Donald Trump that Washington's naval blockade on Iran will remain intact.
US Dollar Price Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the weakest against the Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | INR | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.24% | -0.30% | -1.58% | -0.21% | -0.53% | 0.10% | -0.69% | |
| EUR | 0.24% | -0.03% | -1.35% | 0.03% | -0.27% | 0.31% | -0.42% | |
| GBP | 0.30% | 0.03% | -1.20% | 0.06% | -0.23% | 0.40% | -0.40% | |
| JPY | 1.58% | 1.35% | 1.20% | 1.38% | 1.06% | 1.43% | 0.85% | |
| CAD | 0.21% | -0.03% | -0.06% | -1.38% | -0.33% | 0.28% | -0.48% | |
| AUD | 0.53% | 0.27% | 0.23% | -1.06% | 0.33% | 0.58% | -0.15% | |
| INR | -0.10% | -0.31% | -0.40% | -1.43% | -0.28% | -0.58% | -0.74% | |
| CHF | 0.69% | 0.42% | 0.40% | -0.85% | 0.48% | 0.15% | 0.74% |
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 US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
Trump warns prolong naval blockade on Iran
On late Wednesday, US President Trump announced that he has rejected the recent peace proposal from Iran to reopen the Strait of Hormuz, a vital passage for almost 20% of global energy supply, whose closure has prompted the supply crisis and has boosted oil prices, which could have delayed negotiations regarding Tehran’s nuclear ambitions.
US President Trump said that Washington will continue the naval blockade of Iran until he secures a deal with Tehran to address the country’s nuclear program.
At the press time, the WTI Oil price ticks lower to near $104 after facing slight profit booking near its fresh over seven-week high of $107.35 posted earlier in the day.
Currencies from economies, such as India, that rely heavily on oil imports to meet their energy needs, tend to underperform in a high oil price environment.
Fed sees current policy stance as appropriate
The US Dollar gives back its early losses and slides lower; however, its outlook remains upbeat, following remarks from Fed Chair Jerome Powell that the “number of officials who would support a move away from an easing bias has increased”.
As of writing, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, trades 0.44% lower to near 98.50 after giving back its entire Wednesday's gains.
On Wednesday, the Fed left interest rates steady in the range of 3.50%-3.75%, with an 8-4 majority. One member dissented in favor of a rate cut, while three dissented against the inclusion of an easing bias, according to the monetary policy statement.
In the press conference, Fed Chair Powell warned that the central bank is vigilant to “risks on both sides of our mandate”, adding, “Developments in the Middle East are contributing to uncertainty.”
FIIs continue to dump their stake in Indian stock market
Foreign Institutional Investors (FIIs) remain net sellers in the Indian stock market amid surging oil prices, which have raised concerns about India Inc.'s earnings projections. Overseas investors have remained net sellers in all the previous eight trading days, and have offloaded their stake worth Rs. 22,863.50
Technical Analysis: USD/INR falls back from all-time highs of 95.35
USD/INR falls to near 94.90 after posting a fresh all-time high near 95.35 during the day on Thursday. Broadly, the pair holds a firm bullish bias as spot remains well above the 20-period Exponential Moving Average (EMA) at 93.83, keeping the short-term uptrend intact.
The Relative Strength Index (RSI) hovers near 65.77, indicating strong but not yet extreme upside momentum, which suggests buyers still retain control, though the risk of overextension is building.
On the downside, initial support is aligned with the 20-EMA around 93.81, where a deeper pullback would be expected to attract dip buyers and maintain the broader advance while it holds. A daily close below this dynamic floor would hint at fading upside pressure and open the door to a more extended correction toward prior price congestion levels not yet tested in the current leg. Looking up, the price has entered uncharted territory and will likely extend its rally towards 96.00.
(The technical analysis of this story was written with the help of an AI tool.)
US Dollar FAQs
The US Dollar (USD) is the official currency of the United States of America, and the ‘de facto’ currency of a significant number of other countries where it is found in circulation alongside local notes. It is the most heavily traded currency in the world, accounting for over 88% of all global foreign exchange turnover, or an average of $6.6 trillion in transactions per day, according to data from 2022. Following the second world war, the USD took over from the British Pound as the world’s reserve currency. For most of its history, the US Dollar was backed by Gold, until the Bretton Woods Agreement in 1971 when the Gold Standard went away.
The most important single factor impacting on the value of the US Dollar is monetary policy, which is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability (control inflation) and foster full employment. Its primary tool to achieve these two goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, the Fed will raise rates, which helps the USD value. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates, which weighs on the Greenback.
In extreme situations, the Federal Reserve can also print more Dollars and enact quantitative easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used when credit has dried up because banks will not lend to each other (out of the fear of counterparty default). It is a last resort when simply lowering interest rates is unlikely to achieve the necessary result. It was the Fed’s weapon of choice to combat the credit crunch that occurred during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy US government bonds predominantly from financial institutions. QE usually leads to a weaker US Dollar.
Quantitative tightening (QT) is the reverse process whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing in new purchases. It is usually positive for the US Dollar.
Author
Sagar Dua
FXStreet
Sagar Dua is associated with the financial markets from his college days. Along with pursuing post-graduation in Commerce in 2014, he started his markets training with chart analysis.
