USDINR Analysis: Eyes on FOMC Minutes Today

Indian Rupee

January 3, 2024

New Delhi, India


In recent developments, the Indian Rupee (INR) has encountered challenges, primarily due to a strengthened US Dollar (USD) and various economic factors. Let’s delve into the key elements shaping the currency landscape.

Positive Outlook Boosts Indian Equities:

The positive sentiment surrounding the Indian economy has propelled the market capitalization of Indian equities, positioning them as the fifth-largest globally. Investors are eyeing sustained growth, with the Nifty witnessing a notable 20% surge in 2023, driven by robust quarterly performance and optimism regarding potential Federal Reserve rate cuts.

USD/INR Dynamics and Market Forces:

Amid renewed demand for the US Dollar, the INR has edged lower. Foreign inflows into Indian markets have played a role in supporting the Rupee, yet interventions by the Reserve Bank of India (RBI) have capped its upside. The currency pair, USDINR, is currently trading within a defined range, with technical indicators pointing to an upside bias.

Check: Rupee vs Major Currencies

Upcoming Economic Events and Global Impact:

Market players are closely monitoring key economic events, including the US final ISM Manufacturing PMI and FOMC Minutes. The global economic landscape, particularly the US Manufacturing PMI, indicates a potential economic slowdown. Market expectations, as per the CME FedWatch tool, suggest no interest rate hike in January and a considerable probability of a rate cut in March.

Market Trends and Future Outlook:

Despite headwinds, the Indian share of global market capitalization reached a record 3.8% in 2023. The upcoming US Nonfarm Payrolls report is poised to be a significant market mover, shaping the trajectory for the USD/INR pair in the short term.


As the Indian Rupee navigates through various challenges, market participants are closely monitoring global economic indicators and events. The USDINR exchange rate remains dynamic, influenced by both domestic and international factors. Stay tuned for updates as the currency market continues to evolve.

Also Read: India’s Manufacturing PMI Dips to 18-Month Low at 54.9 in December


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