USD/INR remains firm near weekly high despite FIIs buying, RBI's intervention

💡 DMK Insight

The INR’s struggle against the USD at 91.10 highlights underlying vulnerabilities despite foreign fund inflows. While the influx of foreign capital into Indian equities typically supports the rupee, the current USD/INR level suggests traders are wary of broader economic pressures. Factors like inflation, interest rate differentials, and geopolitical tensions could be weighing on the INR. If the pair breaks above 91.20, it could trigger further selling pressure, leading to a test of 91.50. Conversely, if it holds below 91.10, it might offer a temporary reprieve for the rupee. Keep an eye on upcoming economic data releases that could influence sentiment, particularly any shifts in the Reserve Bank of India’s policy stance. Here’s the thing: while the mainstream narrative focuses on foreign investment as a positive, it’s crucial to consider the potential for profit-taking and how that might impact the INR. Traders should also monitor correlated assets like Indian government bonds, which could reflect shifts in currency sentiment.