The Indian rupee weakened against the U.S. dollar, with USD/INR climbing higher as traders positioned ahead of a key meeting between Donald Trump and Narendra Modi. Investors are watching closely for potential policy shifts that could impact trade and investment flows between the two economies.
The dollar remains firm, supported by strong U.S. economic data and expectations that the Federal Reserve will maintain its restrictive stance for longer. This has limited the rupee’s ability to recover, even as India’s macroeconomic fundamentals remain stable. A cautious tone from India’s central bank has also left traders uncertain about near-term support for the currency.
Geopolitical factors are further influencing sentiment, with trade discussions and diplomatic relations playing a key role in market movements. Any signals from the Trump-Modi meeting regarding trade agreements, tariffs, or investment policies could shift momentum for the rupee, with traders closely watching the tone of the discussions.
Meanwhile, foreign fund flows have added to volatility. While India’s stock markets have remained resilient, any shifts in risk sentiment could lead to capital outflows, adding pressure on the rupee. The Reserve Bank of India’s stance on managing currency fluctuations will also be a factor in determining USD/INR’s trajectory.
With USD/INR holding firm, the next key levels to watch will depend on the outcome of the high-profile meeting. A positive tone on trade and investment ties could help the rupee stabilize, while any uncertainty or stronger dollar positioning could push the pair toward higher resistance levels in the coming sessions.
