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USDINR Today: Rupee Recovers Amid RBI Support and US GDP Anticipation

January 29, 2025

New Delhi, India

Current Performance:

The Indian Rupee (INR) regained ground on Thursday after facing selling pressure in the previous session. Public sector banks, likely acting on behalf of the Reserve Bank of India (RBI), sold US Dollars to stabilize the currency.

  • Key Drivers:
    • RBI Intervention: Helped contain excess volatility in the local currency.
    • Month-End USD Demand: Could limit further INR gains.
    • Foreign Fund Outflows: Overseas investors have pulled nearly $9 billion from Indian markets in January.
    • Trump’s Trade Policies: Uncertainty over US tariff measures keeps markets cautious.

Market Developments:

  • Federal Reserve Decision:
    The Fed held interest rates steady at 4.25%-4.50%, with Chair Jerome Powell stating the need for “real progress on inflation” before considering rate cuts.
  • US Economic Data Focus:
    • Q4 GDP Report (Due Thursday): Expected to provide fresh insights into US economic growth.
    • Initial Jobless Claims & Pending Home Sales: Additional indicators to watch.
  • Trump’s Policy Shift:
    The US administration plans to revoke a climate rule requiring states to cut vehicle emissions, signaling a policy shift under Trump’s leadership.

Outlook for INR:
While RBI’s support may cushion the INR, foreign outflows and US economic uncertainties could cap further gains. The Q4 US GDP release will be crucial in shaping market sentiment.

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Disclaimer:

CurrencyVeda provides this news article for informational purposes only. We do not offer investment advice or recommendations. Before making any investment decisions, please conduct thorough research, consult with financial experts, and carefully consider your financial situation, risk tolerance, and investment goals. Investing in the stock market carries risks, and it’s essential to make informed choices based on your individual circumstances. CurrencyVeda is not liable for any actions taken based on the information provided in this article.

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