USD/INR slides vertically as US-India trade deal strengthens Indian Rupee

💡 DMK Insight

The INR’s sharp gain against the USD signals a pivotal moment for traders: The recent trade deal between the US and India is a game-changer, pushing the USD/INR pair down to around 90.35, a level not seen in nearly three weeks. This drop could indicate a shift in market sentiment, as traders reassess the strength of the dollar in light of improved trade relations. For day traders, this presents a potential short-term opportunity to capitalize on the momentum, especially if the pair tests key support levels around 90.00. But here’s the flip side: while the trade deal is positive, it’s essential to monitor how the broader economic indicators, like inflation rates and interest rate decisions from the Federal Reserve, might impact the USD moving forward. If the USD strengthens due to hawkish signals from the Fed, we could see a quick reversal. Keep an eye on the 90.00 level for potential bounce-back scenarios, as well as any news from the US that could shift sentiment back towards the dollar. In the coming days, watch for volatility around economic data releases that could affect both currencies, particularly any announcements from the Reserve Bank of India regarding monetary policy.