The Indian Rupee holds gains versus the US Dollar as focus turns to Supreme Court decision

Current Status of USD

The US Dollar has been trading mostly sideways following the strong NFP report and slightly soft CPI data from last week. The market has firmed rate cut bets with a forecast of 60 basis points easing by year-end. Further weakness in the dollar seems unlikely unless significant data deterioration occurs. Key indicators will be released this Friday, including US Flash PMIs and Q4 GDP, alongside the upcoming Supreme Court decision on Trump's tariffs.

Trends for INR

The Indian Rupee continues a bearish trend against the US Dollar, but recent developments regarding tariffs and inflation have bolstered the INR. The US and India have reached a trade deal, resulting in President Trump's announcement to reduce tariffs from 25% to 18%. Last week, the RBI held interest rates steady while inflation rose to 2.75% in January from 1.33% in December.

Technical Analysis

On the daily chart, USDINR is consolidating at the lower bound of the channel, with dip-buyers entering to position for a rally towards the upper bound around 93.00. The sellers are eager to see a breakdown to target 89.50 as the next major level. In the 4-hour chart, the price has broken above the downward trendline but has struggled to extend above the strong resistance around 91.00. The next key catalysts will include market reactions to Friday's GDP and potential Supreme Court rulings.

Upcoming Catalysts

Today’s FOMC Meeting Minutes will be released, followed by US Jobless Claims figures tomorrow. Finally, Friday will feature the US Q4 GDP, PCE price index, Flash PMIs, and potential Supreme Court decisions on tariffs.