USD/INR hits record highs as FIIs keep paring stake in Indian equity market
- The Indian Rupee falls further to near 90.00 against the US Dollar amid strong demand for the Greenback by Indian importers.
- FIIs turned out to be net sellers on the first trading day of December.
- Weak US ISM Manufacturing PMI strengthens the case for another Fed interest rate cut this year.
The Indian Rupee (INR) extends its downside move against the US Dollar (USD) on Tuesday. The USD/INR pair rises to near 90.00 as the Indian Rupee continues to underperform its peers amid strong US Dollar demand by importers and the consistent outflow of foreign funds from the Indian stock market.
Foreign Institutional Investors (FIIs) are consistently paring their stake in the Indian stock market amid uncertainty surrounding the trade deal between India and the United States (US). In the last five months, starting July, FIIs have dumped their stake worth Rs. 1,49,718.16 crore. Additionally, overseas investors turned out to be net sellers on the first trading day of December, dumping shares worth Rs. 1,171.31 crores.
The Indian Rupee has failed to attract bids even as domestic Q3 Gross Domestic Product (GDP) data has come in stronger-than-projected. India’s Ministry of Statistics reported on Friday that the economy expanded at a robust pace of 8.2% on an annualized basis, faster than expectations of 7.3% and the prior reading of 7.8%. This was the fastest growth seen in over six quarters.
Going forward, the major trigger for the Indian Rupee will be the monetary policy announcement by the Reserve Bank of India (RBI) on Friday. Market experts are mixed over whether the RBI will cut interest rates in the last policy meeting of the year amid strong GDP growth and inflation remaining well below the central bank’s tolerance range of 2%-6%.
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% | 0.03% | 0.22% | 0.00% | -0.14% | 0.30% | 0.00% | |
| EUR | -0.03% | 0.00% | 0.20% | -0.03% | -0.17% | 0.26% | -0.03% | |
| GBP | -0.03% | -0.00% | 0.19% | -0.03% | -0.19% | 0.26% | -0.02% | |
| JPY | -0.22% | -0.20% | -0.19% | -0.19% | -0.35% | 0.07% | -0.21% | |
| CAD | -0.00% | 0.03% | 0.03% | 0.19% | -0.14% | 0.28% | 0.00% | |
| AUD | 0.14% | 0.17% | 0.19% | 0.35% | 0.14% | 0.42% | 0.14% | |
| INR | -0.30% | -0.26% | -0.26% | -0.07% | -0.28% | -0.42% | -0.28% | |
| CHF | -0.00% | 0.03% | 0.02% | 0.21% | -0.00% | -0.14% | 0.28% |
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 Dollar recovers ahead of US ADP Employment data
- The Indian Rupee struggles to gain ground against the US Dollar, even as the latter struggles to extend Monday’s recovery move. On Monday, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, attracted significant bids after revisiting the monthly low near 99.00. During the press time, the USD Index trades almost flat around 99.40.
- The US Dollar rebounded even as the US Manufacturing Purchasing Managers’ Index (PMI) data for November came in weaker than projected. The Manufacturing PMI dropped to 48.2, while it was expected to come in marginally lower at 48.6 from 48.7 in October. The sub-components of the Manufacturing PMI, such as Employment and New Orders Index, also came significantly lower, which prompted fears of an overall weak demand environment.
- Analysts at ANZ stated that weakness in gauges of employment and new orders in the manufacturing sector supports the case of further monetary policy expansion by the Federal Reserve (Fed) going forward. "It all suggests that demand in the economy has decelerated, adding that the Fed needs to cut interest rates, and not just in December, but follow through with further cuts next year," ANZ said.
- According to the CME FedWatch tool, there is an 87.2% chance that the Fed will cut interest rates by 25 basis points (bps) to 3.50%-3.75% in the December policy meeting.
- For more cues on the Fed’s monetary policy outlook, investors will focus on the US ADP Employment Change and the ISM Services PMI data for November, which will be released on Wednesday. The ADP Employment Change data is expected to show that private employers added 10K fresh workers, significantly lower than 42K in October. The ISM Services PMI is seen lower at 52.1 from 52.4 in October.
Technical Analysis: USD/INR stays above 20-day EMA
In the daily chart, USD/INR trades near 90.00 during European trading hours on Tuesday. The pair holds well above the rising 20-day Exponential Moving Average (EMA) at 89.1655, and the steeper slope confirms a strengthening short-term uptrend. Dips would find initial support at that average.
The 14-day Relative Strength Index (RSI) at 70.43 is overbought. Therefore, the odds are high that the upside could pause if momentum cools.
The rising trend line from 85.3040 underpins the bullish bias, with support flagged near 88.6815. Holding above that line and the 20-day EMA keeps the upside intact. A daily close beneath the 20-day EMA could expose the pair toward the rising trend line around 89.00.
(The technical analysis of this story was written with the help of an AI tool.)
Economic Indicator
ADP Employment Change
The ADP Employment Change is a gauge of employment in the private sector released by the largest payroll processor in the US, Automatic Data Processing Inc. It measures the change in the number of people privately employed in the US. Generally speaking, a rise in the indicator has positive implications for consumer spending and is stimulative of economic growth. So a high reading is traditionally seen as bullish for the US Dollar (USD), while a low reading is seen as bearish.
Read more.Next release: Wed Dec 03, 2025 13:15
Frequency: Monthly
Consensus: 10K
Previous: 42K
Source: ADP Research Institute
Traders often consider employment figures from ADP, America’s largest payrolls provider, report as the harbinger of the Bureau of Labor Statistics release on Nonfarm Payrolls (usually published two days later), because of the correlation between the two. The overlaying of both series is quite high, but on individual months, the discrepancy can be substantial. Another reason FX traders follow this report is the same as with the NFP – a persistent vigorous growth in employment figures increases inflationary pressures, and with it, the likelihood that the Fed will raise interest rates. Actual figures beating 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.
