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USD/INR faces pressure near all-time highs due to RBI's intervention

  • The Indian Rupee surrenders early gains against the US Dollar on RBI's intervetion.
  • US President Trump threatens higher tariffs on imports from India again.
  • India responded strongly to Trump's tariff threats, stating that the nation will take all measures to protect its national interest.

The Indian Rupee (INR) gives up its opening gains against the US Dollar (USD) on Tuesday. The USD/INR pair falls to near 88.00 after revisiting its all-time high of around 88.25. The Indian currency appreciates temporarily due to Reserve Bank of India's (RBI) into currency markets.

A report from Reuters showed that the RBI likely sold US Dollars via state-run banks before the opening of the Indian market.

The Indian Rupee remains on the backfoot as trade tensions between India and the United States (US) have escalated. On Monday, US President Donald Trump threatened, through a post on Truth.Social, India again with higher tariffs for buying Oil from Russia, a move that has been interpreted as funding Moscow to continue the war with Ukraine.

"India is not only buying massive amounts of Russian Oil, they are then, for much of the Oil purchased, selling it on the Open Market for big profits. They don’t care how many people in Ukraine are being killed by the Russian War Machine," Trump wrote. He further added, "Because of this, I will be substantially raising the Tariff paid by India to the USA.”

Last week, US President Trump announced 25% tariffs on imports from India along with an unspecified duty for buying Russian Oil, citing that their tariffs are too high.

In response to Trump’s tariff threats, India’s Ministry of External Affairs (MEA) stated that the targeting of India is “unjustified and unreasonable”, Reuters reported. To support their response, the agency released a six-point statement sheet on Monday, which also stated that India will take all necessary measures to safeguard its “national interests and economic security”.

According to India’s response sheet, Washington praised New Delhi for buying Russian Oil as the act brought stability in the global energy market.

Indian Rupee PRICE Today

The table below shows the percentage change of Indian Rupee (INR) against listed major currencies today. Indian Rupee was the strongest against the Swiss Franc.

USDEURGBPJPYCADAUDINRCHF
USD0.27%-0.07%0.28%0.18%0.24%-0.10%0.40%
EUR-0.27%-0.35%0.00%-0.08%-0.11%-0.06%0.13%
GBP0.07%0.35%0.31%0.26%0.25%-0.05%0.36%
JPY-0.28%0.00%-0.31%-0.09%0.05%-0.07%0.12%
CAD-0.18%0.08%-0.26%0.09%0.00%0.02%0.09%
AUD-0.24%0.11%-0.25%-0.05%-0.01%0.04%0.12%
INR0.10%0.06%0.05%0.07%-0.02%-0.04%0.20%
CHF-0.40%-0.13%-0.36%-0.12%-0.09%-0.12%-0.20%

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: RBI will announce monetary policy on Wednesday

  • Apart from US-India trade tensions, the continuous outflow of foreign funds from Indian equity markets, and uncertainty surrounding the Reserve Bank of India’s (RBI) monetary policy announcement on Wednesday have also kept the Indian Rupee under pressure.
  • In two trading sessions of August, Foreign Institutional Investors (FIIs) have sold Rs. 5,932.91 crores worth of Indian equity cumulatively. The outflow of significant foreign funds from an economy often leads to depreciation of its currency.
  • On Wednesday, the RBI is almost certain to leave its Repo Rate unchanged at 5.5%. In June, the Indian central bank surprisingly reduced the Repo Rate by 50 basis points (bps), citing that they have front-loaded interest rate cuts to boost economic growth. As the RBI is expected to maintain the status quo, investors will pay close attention to the monetary policy guidance for the remainder of the year.
  • Cooling inflationary pressures, US-India trade tensions, and the upcoming festive season point to the need for further monetary policy expansion in the near term. In June, the Retail inflation grew moderately by 2.1% on year, the lowest level seen in almost six years.
  • In the US, growing expectations that the Federal Reserve (Fed) could resume its monetary expansion cycle in the September meeting, which it paused in December, have capped the upside in the US Dollar.
  • According to the CME FedWatch tool, the probability of the Fed cutting interest rates in the September meeting has increased to 92.2% from 41.2% seen on Thursday, a day before the release of the Nonfarm Payroll (NFP) data for July.
  • The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, wobbles near Friday’s low around 98.60.
  • In Tuesday’s session, investors will focus on the US revised S&P Global and ISM Services Purchasing Managers’ Index (PMI) data for July, which will be published during North American trading hours.

Technical Analysis: USD/INR revisits all-time highs near 88.25

USD/INR revisits all-time highs around 88.25 at open on Tuesday. The near-term trend of the pair remains bullish as the 20-day Exponential Moving Average (EMA) slopes higher around 86.92.

The 14-day Relative Strength Index (RSI) oscillates within the 60.00-80.00 range, suggesting strong bullish momentum.

Looking down, the 20-day EMA will act as key support for the major. On the upside, the round-level of 89.00 could act as a critical hurdle for the pair.

Economic Indicator

ISM Services PMI

The Institute for Supply Management (ISM) Services Purchasing Managers Index (PMI), released on a monthly basis, is a leading indicator gauging business activity in the US services sector, which makes up most of the economy. The indicator is obtained from a survey of supply executives across the US based on information they have collected within their respective organizations. Survey responses reflect the change, if any, in the current month compared to the previous month. A reading above 50 indicates that the services economy is generally expanding, a bullish sign for the US Dollar (USD). A reading below 50 signals that services sector activity is generally declining, which is seen as bearish for USD.

Read more.

Next release: Tue Aug 05, 2025 14:00

Frequency: Monthly

Consensus: 51.5

Previous: 50.8

Source: Institute for Supply Management

The Institute for Supply Management’s (ISM) Services Purchasing Managers Index (PMI) reveals the current conditions in the US service sector, which has historically been a large GDP contributor. A print above 50 shows expansion in the service sector’s economic activity. Stronger-than-expected readings usually help the USD gather strength against its rivals. In addition to the headline PMI, the Employment Index and the Prices Paid Index numbers are also watched closely by investors as they provide useful insights regarding the state of the labour market and inflation.

Author

Sagar Dua

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.

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