The USD/INR pair held firm as investors stayed cautious ahead of the Federal Reserve’s upcoming rate decision. With markets widely expecting the Fed to maintain a hawkish stance, traders refrained from taking aggressive positions, keeping the pair in a tight range.
The U.S. dollar remained stable against major currencies, limiting volatility in the Indian rupee, while domestic factors such as foreign fund flows and crude oil prices played a secondary role. Analysts suggest that any surprise shift in Fed policy could drive short-term fluctuations, particularly if rate projections indicate a more prolonged tightening cycle.
Despite steady trade, market participants remain on edge, watching for signals from Fed Chair Jerome Powell’s remarks on future monetary policy. A dovish pivot could weaken the dollar, offering relief to emerging market currencies, while a more aggressive tone could push the USD/INR higher.
Until the decision is announced, traders are likely to exercise caution, with the rupee’s near-term direction hinging on the Fed’s policy path. The focus now shifts to post-meeting commentary, which could set the tone for broader currency market movements in the weeks ahead.
