USD/INR bounces back as Indian importers pick RBI's intervention-led decline
- The Indian Rupee falls back against the US Dollar after failing to capitalize on the RBI’s intervention-led support.
- Unexpectedly strong US ISM Services PMI data for December has strengthened the US Dollar.
- Investors await the US NFP data for fresh cues on the Fed’s monetary policy outlook.
The Indian Rupee (INR) trades lower against the US Dollar (USD) during Indian trading hours on Thursday, after a decent upside move the previous day. The USD/INR pair jumps to near 90.30 as the Indian Rupee struggles to regain ground despite the Reserve Bank of India’s (RBI) intervention on Wednesday.
Traders stated on Wednesday that the RBI sold US Dollars aggressively for the first time this year, resembling similar action seen multiple times in 2025 to counter one-way excessive moves.
The Indian Rupee struggles to capitalize on RBI-led support, as Indian importers find the USD/INR correction attractive to build fresh positions, according to Reuters. The demand for US Dollars by Indian importers has remained upbeat amid trade frictions between the United States (US) and India since mid-2025, when Washington raised tariffs on imports from New Delhi to 50% for buying oil from Russia.
This week, trade tensions between the two nations have renewed as US President Donald Trump threatened to raise tariffs on India further for not supporting Washington on the Russian oil issue.
US-India trade tensions have also been a major drag on foreign investors' interest in the Indian equity market. Foreign Institutional Investors (FIIs) remained net sellers in eight out of 12 months in 2025. So far in January, overseas investors have sold shares worth Rs. 4,650.39 crore.
The table below shows the percentage change of Indian Rupee (INR) against listed major currencies today. Indian Rupee was the weakest against the Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | INR | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.04% | 0.13% | -0.16% | 0.18% | 0.32% | 0.27% | 0.02% | |
| EUR | -0.04% | 0.09% | -0.18% | 0.14% | 0.28% | 0.22% | -0.02% | |
| GBP | -0.13% | -0.09% | -0.25% | 0.06% | 0.19% | 0.15% | -0.11% | |
| JPY | 0.16% | 0.18% | 0.25% | 0.31% | 0.47% | 0.39% | 0.15% | |
| CAD | -0.18% | -0.14% | -0.06% | -0.31% | 0.15% | 0.08% | -0.17% | |
| AUD | -0.32% | -0.28% | -0.19% | -0.47% | -0.15% | -0.07% | -0.32% | |
| INR | -0.27% | -0.22% | -0.15% | -0.39% | -0.08% | 0.07% | -0.25% | |
| CHF | -0.02% | 0.02% | 0.11% | -0.15% | 0.17% | 0.32% | 0.25% |
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).
US ISM Services PMI unexpectedly expands faster in December
- The upside move in the USD/INR pair is also driven by strength in the US Dollar. At the time of writing, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, trades flat around 98.70, but gained on Wednesday, following the release of the surprisingly upbeat US ISM Services Purchasing Managers’ Index (PMI) data for December.
- The ISM showed on Wednesday that the Services PMI expanded at a faster pace to 54.4 from 52.6 in November, while it was expected to come in lower at 52.3, indicating that the US services sector ended 2025 on a firm note. Additionally, other components of Services PMI, such as Employment Index and New Orders Index, also outperformed.
- However, US ADP Employment Change and JOLTS Job Opening data remained weaker than projected. The ADP reported that private employers added 41K workers in December, lower than estimates of 47K. Still, numbers should be treated cautiously as 29K workers were fired in November. Meanwhile, fresh jobs posted in November were 7.15 million, lower than estimates of 7.6 million and the prior reading of 7.45 million.
- Signs of cooling labor demand could prompt traders to raise bets supporting interest rate cuts by the Federal Reserve (Fed) in its upcoming monetary policy meetings.
- To get more detailed information on the current state of the US job market, investors will focus on the Nonfarm Payrolls (NFP) data for December, which will be published on Friday. The NFP report is expected to show that the economy added 60K fresh workers, slightly lower than 64K in November. The Unemployment Rate is expected to fall to 4.5% from the prior reading of 4.6%.
Technical Analysis: USD/INR strives to stay above 20-day EMA
USD/INR moves higher to near 90.35 on Thursday. The pair juggles near the 20-day Exponential Moving Average (EMA) at 90.2025, which has flattened and started to roll over, capping rebounds. While below that gauge, the short-term bias softens.
The 14-day Relative Strength Index (RSI) at 54 (neutral) confirms momentum has ebbed without a clear directional drive.
A daily close back above the 20-day EMA would improve momentum and could reopen a topside extension toward the all-time high of 91.55. Failure to clear that gauge keeps a drift lower in play, which might lead to a deeper retracement toward the December 19 low of 89.50.
(The technical analysis of this story was written with the help of an AI tool.)
Economic Indicator
Nonfarm Payrolls
The Nonfarm Payrolls release presents the number of new jobs created in the US during the previous month in all non-agricultural businesses; it is released by the US Bureau of Labor Statistics (BLS). The monthly changes in payrolls can be extremely volatile. The number is also subject to strong reviews, which can also trigger volatility in the Forex board. Generally speaking, a high reading is seen as bullish for the US Dollar (USD), while a low reading is seen as bearish, although previous months' reviews and the Unemployment Rate are as relevant as the headline figure. The market's reaction, therefore, depends on how the market assesses all the data contained in the BLS report as a whole.
Read more.Next release: Fri Jan 09, 2026 13:30
Frequency: Monthly
Consensus: 60K
Previous: 64K
Source: US Bureau of Labor Statistics
America’s monthly jobs report is considered the most important economic indicator for forex traders. Released on the first Friday following the reported month, the change in the number of positions is closely correlated with the overall performance of the economy and is monitored by policymakers. Full employment is one of the Federal Reserve’s mandates and it considers developments in the labor market when setting its policies, thus impacting currencies. Despite several leading indicators shaping estimates, Nonfarm Payrolls tend to surprise markets and trigger substantial volatility. Actual figures beating the consensus tend to be USD bullish.
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.
