USD/INR PRIMED FOR EXTENDED DECLINE AS POTENTIAL FED RATE CUTS LOOM

USD/INR PRIMED FOR EXTENDED DECLINE AS POTENTIAL FED RATE CUTS LOOM

Indian Rupee Strengthens Amid Dollar Weakness

The Indian rupee has appreciated against the U.S. dollar, closing at 85.5225 on Thursday, marking its fourth consecutive session of gains.

This trend is attributed to increased foreign equity inflows and a weakening U.S. dollar, which has declined over 4% in April due to ongoing trade tariff concerns.

Federal Reserve Chair Jerome Powell indicated that the central bank can afford to remain patient before adjusting interest rates, citing the need to evaluate the economic impact of trade policies.

This cautious stance has led markets to anticipate fewer rate cuts in the near future, which has supported the U.S. dollar.

Concerns over new U.S. tariffs, particularly on Chinese goods, have contributed to a decline in the dollar index, which fell 0.5% to 99.6.

These trade tensions have prompted a flight to safe-haven assets like gold and the Swiss franc, further weakening the dollar.

Analysts suggest that if the rupee decisively breaks past the 85.50 level, it could approach the 85 mark in the near-term.

the Reserve Bank of India is expected to intervene to prevent excessive volatility, aiming to maintain stability in the currency markets.