The USD/INR pair edged higher, reflecting mild gains in early trading, as continued foreign outflows weighed on Indian markets. The rupee struggled to hold ground against the dollar, with persistent selling by foreign institutional investors adding pressure on domestic equities and the currency.
Market sentiment remains cautious amid concerns over global monetary tightening and its impact on risk assets. A stronger U.S. dollar, buoyed by expectations of further Federal Reserve rate hikes, has added to the rupee’s woes, making the USD/INR pair trend upward in recent sessions.
Foreign outflows have exacerbated the situation, with investors reallocating capital to safer havens as geopolitical uncertainties and global recession fears grow. This has further reduced demand for Indian assets, pushing the rupee to test near-term support levels against the greenback.
While the Reserve Bank of India’s measures to stabilize the rupee have provided some relief, the ongoing outflows and external pressures suggest limited room for immediate recovery. Traders are closely monitoring upcoming U.S. economic data and Fed commentary, which could set the tone for the pair’s next move.
