June 3, 2025
New Delhi, India
USDINR Today
The Indian Rupee (INR) weakened in early trade on Tuesday, as a renewed demand for the US Dollar (USD) and a spike in crude oil prices exerted downward pressure on the local currency.
The pressure on the rupee was compounded by rising oil prices, which raise India’s import bill and widen the trade deficit.
Key Domestic Supportive Factors
Despite the weakness, the Indian rupee may find some near-term support from:
India’s robust Q1 GDP growth, which came in at 7.4% YoY, up from 6.2% the previous quarter and higher than the forecast of 6.7%.
Equity-related foreign inflows linked to the rebalancing of a global equity index, which could bring in foreign capital.
India continues to retain its position as the world’s fastest-growing major economy, although the pace has moderated from the 9.2% growth recorded in FY2023–24.
Global Market Cues in Focus
The forex market is now bracing for key events later this week:
US JOLTs Job Openings report is due later today, which could influence dollar strength.
The Reserve Bank of India (RBI) will announce its monetary policy decision on Friday, with expectations of a third consecutive 25 bps rate cut to support economic growth.
Also on Friday, the US May jobs report will offer more cues on the Federal Reserve’s rate outlook.
Adding to global uncertainty, Reuters reported that the US administration has asked trade partners to finalize offers by Wednesday to reach new trade deals before July 8.
Meanwhile, the US ISM Manufacturing PMI dropped to 48.5 in May, down from 48.7 in April, indicating continued contraction and missing the estimate of 49.5. This may further impact global sentiment on the dollar.
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