USD/INR gains as RBI rolls back INR-supportive measures, Warsh's testimony awaited

The Indian Rupee (INR) extends Monday's losses against the US Dollar (USD) on Tuesday. The USD/INR pair rises further to near 93.50 as the Indian currency faces selling pressure, following the Reserve Bank of India (RBI) rolling back partial measures that were meant to diminish the impact of one-way excessive moves against the domestic currency.

On late Monday, the RBI announced that it withdrew curbs on state-run banks, which were restricting them from offering non-deliverable forwards (NDFs) to resident and non‑resident users and dropped curbs that prevented users from rebooking foreign exchange derivative contracts, Reuters reports.

US-Iran will likely resume peace talks

The risk appetite of financial market participants has improved significantly, as Iran has agreed to return to the table with the United States (US) to resume talks regarding a permanent ceasefire.

A report from The Wall Street Journal (WSJ) has shown that Iran has told regional mediators that it would send a negotiating team to Islamabad on Tuesday for the second round of talks with the US. However, there has been no official confirmation by Tehran.

While Washington had already confirmed that Vice President (VP) JD Vance is leaving for Islamabad and will lead the team in negotiations with Tehran, which will likely take place on either Tuesday night or Wednesday morning.

On Monday, market sentiment turned risk-averse after Iran refused to sit down again with the US, while accusing it of violating ceasefire terms. Iran's foreign ministry spokesperson Esmail Baghaei said that there is “no plan for a second round of negotiations with the US for now."

FIIs remain net sellers on Monday

While strength in global markets reflects confidence that the US and Iran would lead to a permanent ceasefire soon, the sentiment of overseas investors toward the Indian stock market continues to remain lackluster.

On Monday, Foreign Institutional Investors (FIIs) remained net sellers in the Indian stock market after raising a little stake in the April 15-17 period. FIIs sold shares worth Rs. 1,059.53 crore on the first trading day of the week. In the last three trading days of the previous week, FIIs purchased shares worth Rs. 1,731.71 (Rs. 577.24 crore on average).

Warsh’s testimony and US Retail Sales data awaited

In Tuesday’s session, investors will focus on the speech of US President Donald Trump’s nominee Kevin Warsh for the Federal Reserve’s (Fed) new chairman in his confirmation hearing and US Retail Sales data for March, which will be published at 12:30 GMT.

The Retail Sales data, a key measure of consumer spending, is estimated to have grown 1.4% on a monthly basis against February’s reading of 0.6%. Investors will monitor the data to get cues regarding the overall demand for households.

Technical Analysis: USD/INR aims for sustainability above 93.50

USD/INR trades higher at around 93.50 at the press time. The near-term tone of the pair turns bullish, as it returns above the 20-day Exponential Moving Average (EMA), which is at 93.08.

The Relative Strength Index (14) continues to wobble inside the 40.00-60.00 zone, reflecting a sideways trend.

Looking up, the spot could attempt further recovery towards 94.00 if it manages to sustain firmly above the 20-day EMA. On the downside, the price could return to the March 3 high at 92.46 if it fails to hold above the average.

(The technical analysis of this story was written with the help of an AI tool.)

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