USD/INR Edges Lower as Possible RBI Intervention Limits Upside

Indian Rupee (INR) Recovers from Record Low; RBI Intervention and Global Factors in Focus

The Indian Rupee (INR) staged a recovery on Tuesday after hitting a record low in the previous session, supported by potential intervention from the Reserve Bank of India (RBI). However, the rupee’s gains remain capped as broad-based demand for the US dollar (USD) continues to weigh on the local currency. Adding to the pressure, a sharp decline in domestic equity markets and sustained foreign capital outflows further dampen sentiment for the INR.

Market participants are also monitoring developments around the incoming US administration’s tariff policies under President-elect Donald Trump. Analysts suggest that if the proposed tariffs are less aggressive than Trump’s campaign promises and target only key sectors, it could boost global growth prospects and weaken the USD.

Traders will keep a close eye on the US ISM Services PMI data, set for release later on Tuesday. Additionally, the Federal Reserve’s December policy meeting minutes, due Wednesday, and the crucial US Nonfarm Payrolls (NFP) report on Friday are likely to influence USD and global market sentiment.