USDINR: Rising Yields and Dollar Demand Shape Rupee’s Fate

U.S. economy

September 26, 2023

New Delhi, India


The USDINR has started trading at approximately 83.34 on the October futures, with the spot market around 83.23. It’s just 6 paise away from it’s all-time highs. Global factors are favoring the USDINR, with the US Dollar Index reaching multi-month highs and US bond yields surging to levels not seen since 2007. While oil prices aren’t currently a major concern, the combination of rising US yields and risk-off sentiment in the equity markets may drive the USDINR higher. As it approaches the historical high near 83.29 levels, central bank intervention may increase. If it surpasses its previous peak, short covering could push prices even higher. The primary support zone remains in the vicinity of 83.00, with additional support at 82.80 in the spot market.


Weak UK economic data and the Bank of England’s decision to maintain rates are pressuring GBPUSD and GBPINR. Increasing US bond yields are exacerbating the situation. GBPINR is closely linked to GBPUSD and USDINR movements. If GBPUSD reaches its early 2023 lows around 1.1850, GBPINR could decline to levels near 98.50/99.00 in the medium term. Nevertheless, short-term trends appear to indicate oversold conditions, suggesting a temporary rebound. Key resistance levels to watch are around 102.00 and 102.25, with interim support likely near 101.55 and 100.30. *(Yesterday’s Close: 101.5400, Day’s Range: 101.35 – ₹101.66)*


German business confidence declined in September for the fifth consecutive month, raising concerns of a potential recession in the Eurozone’s largest economy. The Ifo institute reported a drop in its business climate index to 85.7, although it exceeded expectations. These unfavorable economic conditions in the Eurozone, coupled with robust conditions in the US, are impacting EURINR negatively. The EURUSD is trading at its lowest level since March 2023, driven by a stable USDINR and a weaker EURUSD. The outlook for EURINR remains bearish in the near term. *(Yesterday’s Close: 88.1025, Day’s Range: 88.06 – ₹88.32)*


The last traded price of JPYINR was 56.0050, down by -0.12%. The day’s range for JPY/INR was a high of ₹56.06 and a low of 55.93. JPYINR rates are down by -1.56% over the last one month, and down by -6.91% over the last three months. As the JPYINR faces challenges amid global market dynamics, its short-term outlook remains cautious. Key support levels are expected near 55.93 and resistance around 56.06. (Yesterday’s Close: 56.0050, Day’s Range: 55.93 – ₹56.06)