Select Language

USD/INR ticks higher as US Dollar rebounds despite ongoing US-China trade tensions

Breaking news

USD/INR ticks higher as US Dollar rebounds despite ongoing US-China trade tensions

  • X
  • facebook
  • LINE
  • RSS

  • X
  • facebook
  • LINE
  • RSS
New update 2025.10.23 13:55
USD/INR ticks higher as US Dollar rebounds despite ongoing US-China trade tensions

update 2025.10.23 13:55

  • The Indian Rupee faces slight selling pressure against the US Dollar as the latter rebounds after a corrective move.
  • Washington threatens to block software-powered exports to Beijing ahead of the Bessent-He meeting.
  • The US could reduce tariffs on imports from India to 15%-16%, Mint reported.

The Indian Rupee (INR) opens on a slightly cautious note against the US Dollar (USD) on Thursday after two holidays in Indian markets. The USD/INR ticks up to near 88.05 as the US Dollar rebounds after a slight corrective move on Wednesday, despite renewed trade tensions between the United States (US) and China.

During the Asian session, the US Dollar Index (DXY), which tracks the Greenback's value against six major currencies, trades 0.15% higher to near 99.00.

The uncertainty over US-China trade relations escalated after a report from Reuters stated that the White House is planning to curb the export of "any and all critical software" starting November 1. This comes at a time when US Treasury Secretary Scott Bessent and China Vice Premier He Lifeng are scheduled to meet this weekend in Malaysia to discuss various issues, including recently announced export controls on rare earth minerals by Beijing and additional 100% tariffs by Washington.

Later this month, US President Donald Trump and Chinese leader Xi Jinping are also scheduled to meet in South Korea. Lately, Trump has expressed confidence that both nations will reach a trade agreement during the meeting.

Daily digest market movers: FIIs turn out to be buyers so far in October in Indian stock market

  • The Indian Rupee ticks down against the US Dollar, even as a report from Mint has stated that the US and India are close to reaching a trade deal. The report also showed that Washington will reduce duty on imports from New Delhi to 15%-16% from 50%. Mint also stated that India will gradually scale back its import of seaborne crude Oil from Russia, which remained a major reason for trade tensions between the nations.
  • The scenario of the US-India reaching a trade deal would be favorable for the Indian Rupee, which had been underperforming its peers due to trade frictions.
  • Meanwhile, the Foreign Institutional Investors (FIIs) trading data have shown that funds from overseas investors are gradually returning to Indian stock markets after a massive outflow in the July-September period. FIIs have been net buyers over the last five trading days, pumping Rs. 2,262.08 crores into the Indian equity market. So far in October, FIIs have purchased Indian shares worth Rs. 300.41 crores.
  • The gradual return of foreign funds into Indian markets suggests that overseas investors are not significantly bearish on the equity market outlook. Meanwhile, Indian bourses have also opened on a positive note after two holidays. Nifty 50 has jumped 0.8% to near 26,080, the highest level seen in a year. A strong upside move in the benchmark index is mainly contributed by technology stocks.
  • In the US, investors await the delayed Consumer Price Index (CPI) data for September, which is scheduled for release on Friday. The inflation data has been delayed due to the ongoing US government shutdown. The data will significantly influence market expectations for the Federal Reserve's (Fed) monetary policy outlook.
  • Economists expect the US headline inflation to have risen at a faster pace of 3.1% on an annualized basis, up from the prior release of 2.9%, with core figures growing steadily by 3.1%.
  • Ahead of the US inflation data, the CME FedWatch tool indicates that traders are confident the Fed will reduce interest rates again by 25 basis points (bps) at the policy meeting later this month.

Technical Analysis: USD/INR continues to face pressure near 50-day EMA

USD/INR edges higher to near 88.05 at open on Thursday. The 50-day Exponential Moving Average (EMA) near 88.13 is acting as a key barrier for the USD/INR bulls.

The 14-day Relative Strength Index (RSI) falls below 40.00. A fresh bearish momentum if the RSI holds below that level.

Looking down, the August 21 low of 87.07 will act as key support for the pair. On the upside, the 20-day EMA will be a key barrier.

 

Indian Rupee FAQs

The Indian Rupee (INR) is one of the most sensitive currencies to external factors. The price of Crude Oil (the country is highly dependent on imported Oil), the value of the US Dollar - most trade is conducted in USD - and the level of foreign investment, are all influential. Direct intervention by the Reserve Bank of India (RBI) in FX markets to keep the exchange rate stable, as well as the level of interest rates set by the RBI, are further major influencing factors on the Rupee.

The Reserve Bank of India (RBI) actively intervenes in forex markets to maintain a stable exchange rate, to help facilitate trade. In addition, the RBI tries to maintain the inflation rate at its 4% target by adjusting interest rates. Higher interest rates usually strengthen the Rupee. This is due to the role of the 'carry trade' in which investors borrow in countries with lower interest rates so as to place their money in countries' offering relatively higher interest rates and profit from the difference.

Macroeconomic factors that influence the value of the Rupee include inflation, interest rates, the economic growth rate (GDP), the balance of trade, and inflows from foreign investment. A higher growth rate can lead to more overseas investment, pushing up demand for the Rupee. A less negative balance of trade will eventually lead to a stronger Rupee. Higher interest rates, especially real rates (interest rates less inflation) are also positive for the Rupee. A risk-on environment can lead to greater inflows of Foreign Direct and Indirect Investment (FDI and FII), which also benefit the Rupee.

Higher inflation, particularly, if it is comparatively higher than India's peers, is generally negative for the currency as it reflects devaluation through oversupply. Inflation also increases the cost of exports, leading to more Rupees being sold to purchase foreign imports, which is Rupee-negative. At the same time, higher inflation usually leads to the Reserve Bank of India (RBI) raising interest rates and this can be positive for the Rupee, due to increased demand from international investors. The opposite effect is true of lower inflation.



Date

Created

 : 2025.10.23

Update

Last updated

 : 2025.10.23

Related articles


Show more

FXStreet

Financial media

arrow
FXStreet

FXStreet is a forex information website, delivering market analysis and news articles 24/7.
It features a number of articles contributed by well-known analysts, in addition to the ones by its editorial team.
Founded in 2000 by Francesc Riverola, a Spanish economist, it has grown to become a world-renowned information website.

Was this article helpful?

We hope you find this article useful. Any comments or suggestions will be greatly appreciated.  
We are also looking for writers with extensive experience in forex and crypto to join us.

please contact us at [email protected].

Thank you for your feedback.
Thank you for your feedback.

Most viewed

EUR/GBP Price Forecasts: Trapped in a tightening range around 0.8700

The Euro is giving away most of the gains taken on Wednesday on Thursday, amid the softer-than-expected UK inflation data, and returns below 0.8700.
New
update2025.10.23 17:03

SNB minutes rule of fears of inflation remaining persistently negative

The latest minutes from the Swiss National Bank's (SNB) September monetary policy meeting express that interest rates won't fall into negative territory as inflationary pressures in the economy are not expected to become persistently negative.
New
update2025.10.23 16:45

USD/CAD Price Forecast: Remains below 1.4000, tests lower ascending channel boundary

USD/CAD moves little after two days of losses, trading around 1.3990 during the early European hours on Thursday. The technical analysis of the daily chart suggests a weakening of a prevailing bullish bias as the pair is attempting to break below the ascending channel pattern.
New
update2025.10.23 16:40

EUR/USD ticks lower as US Dollar edges up amid fresh trade tensions

EUR/USD drifts lower at the European session opening on Thursday, trading right below 1.1600 at the time of writing, down from the previous day's highs at 1.1620.
New
update2025.10.23 16:37

Forex Today: Choppy action continues ahead of US housing data

Here is what you need to know on Thursday, October 23:
New
update2025.10.23 16:32

FX option expiries for Oct 23 NY cut

FX option expiries for Oct 23 NY cut at 10:00 Eastern Time via DTCC can be found below.
New
update2025.10.23 16:29

WTI Oil returns above $60.00 amid US sanctions against Russian Crude

Oil prices have accelerated their recovery with US benchmark West Texas Intermediate (WTI) returning to levels beyond $60.00 line as the US administration imposed new sanctions on Russia's largest Oil companies, which are expected to restrict global supply.The US Department of the Treasury announced
New
update2025.10.23 16:28

NZD/USD holds steady below 0.5750, US-China trade talks in focus

The NZD/USD pair trades on a flat note near 0.5735 during the early European session on Thursday. The US Dollar (USD) steadies against the New Zealand Dollar (NZD) as traders remain on edge ahead of delayed US inflation data and upcoming US-China trade talks. 
New
update2025.10.23 15:53

Crude Oil price today: WTI price bullish at European opening

West Texas Intermediate (WTI) Oil price advances on Thursday, early in the European session. WTI trades at $60.76 per barrel, up from Wednesday's close at $59.34.Brent Oil Exchange Rate (Brent crude) is also up, advancing from the $63.15 price posted on Wednesday, and trading at $64.52.
New
update2025.10.23 15:04

EUR/USD edges down to near 1.1600 as US Dollar bounces back, US inflation data in focus

The EUR/USD pair ticks lower to near 1.1600 during the late Asian trading session on Thursday. The major currency pair faces slight selling pressure as the US Dollar (USD) gains ground after Wednesday's corrective move.
New
update2025.10.23 14:40

Disclaimer:arw

All information and content provided on this website is provided for informational purposes only and is not intended to solicit any investment. Although all efforts are made in order to ensure that the information is correct, no guarantee is provided for the accuracy of any content on this website. Any decision made shall be the responsibility of the investor and Myforex does not take any responsibility whatsoever regarding the use of any information provided herein.

The content provided on this website belongs to Myforex and, where stated, the relevant licensors. All rights are reserved by Myforex and the relevant licensors, and no content of this website, whether in full or in part, shall be copied or displayed elsewhere without the explicit written permission of the relevant copyright holder. If you wish to use any part of the content provided on this website, please ensure that you contact Myforex.

  • Facebook
  • Twitter
  • LINE

Myforex uses cookies to improve the convenience and functionality of this website. This website may include cookies not only by us but also by third parties (advertisers, log analysts, etc.) for the purpose of tracking the activities of users. Cookie policy

I agree
share
Share
Cancel