March 17, 2025
New Delhi, India
USDINR
The Indian Rupee (INR) gained traction in Monday’s early European session, supported by US Dollar (USD) sales from foreign banks. The Greenback weakened amid concerns over slowing US economic growth due to trade policies under the Trump administration, further boosting the INR.
India’s Wholesale Price Index (WPI) inflation rose to 2.38% in February from 2.31% in January, surpassing expectations of 2.36%. The local currency remained stronger in response to the hotter inflation data.
However, gains in the INR might be limited as crude oil prices rise. As the world’s third-largest oil consumer, India is particularly vulnerable to higher energy costs, which tend to weigh on the Rupee.
Looking ahead, investors await the US Retail Sales data for February, due later on Monday. This report will provide insights into consumer sentiment and spending trends in the US. Additionally, market participants are focused on the US Federal Reserve’s interest rate decision on Wednesday. While the Fed is expected to keep rates unchanged, traders will closely watch policy guidance for future rate cuts.
Indian Rupee Faces Resistance Amid Market Headwinds
- The INR is expected to face strong resistance around 86.50 while finding support near the 87.40-50 zone, according to Dilip Parmar, a forex research analyst at HDFC Securities.
- India’s economic indicators suggest moderating inflation, improved industrial output, and strong corporate earnings, per SBI Ecowrap.
- Morgan Stanley projects India to become the world’s third-largest economy by 2028, driven by policy stability and infrastructure improvements.
- The University of Michigan (UoM) Consumer Sentiment Index fell to 57.9 in March, its lowest since November 2022, below market expectations of 63.1.
- The UoM five-year Consumer Inflation Expectation surged to 3.9% in March from 3.5% in February.
- Market expectations for a Fed rate cut remain high, with nearly 75% odds of a quarter-point reduction by June, according to the CME FedWatch tool.
USDINR closed at 86.739 down −0.1820−0.21%.
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