Indian Rupee maintains position as US-India trade framework boosts sentiment

💡 DMK Insight

The USD/INR’s recent depreciation signals a shift in market dynamics, driven by the new US-India trade framework. This interim agreement, focusing on tariff reductions and energy cooperation, could bolster the INR in the short term. Traders should monitor how this impacts the USD/INR pair, especially if it breaks below key support levels. A sustained move under these levels could trigger further selling pressure on the USD, while any positive sentiment towards the INR could attract institutional buying. However, keep an eye on broader economic indicators, such as US inflation data and Fed interest rate decisions, as these could counteract INR strength. The real story here is whether this framework translates into tangible economic benefits or remains a political gesture. Watch for volatility around upcoming trade discussions, as any missteps could quickly reverse gains in the INR.