The USD/INR pair pares its daily gains but maintains its position near an all-time high of 91.96, reached on January 23. The Indian Rupee (INR) is receiving support as market sentiment improves following India’s decision to cut tariffs on car imports from the European Union (EU) to 40% from a maximum of 110%.
Indian Prime Minister Narendra Modi’s government has agreed to immediately reduce customs duties on some vehicles priced above 15,000 euros, with rates gradually falling to 10%, making it easier for automakers such as Volkswagen, Mercedes-Benz and BMW to enter the market.
INR may remain under pressure against the US Dollar (USD) as traders remain cautious ahead of the Federal Reserve’s (Fed) policy decision on Wednesday. Although rates are expected to remain unchanged, markets will be watching the Fed’s statement and Chairman Jerome Powell’s press conference for clues on the timing of future rate cuts.
US Dollar Price Today
The table below shows the percentage change of the United States Dollar (USD) against the major currencies listed today. The US dollar was the weakest against the Indian rupee.
| USD | EUR | EUR | JPY | GUJAT | EUR | CAD | INR | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.25% | 0.10% | 0.51% | 0.17% | 0.22% | 0.32% | -0.03% | |
| EUR | -0.25% | -0.15% | 0.24% | -0.08% | -0.04% | 0.07% | -0.27% | |
| EUR | -0.10% | 0.15% | 0.38% | 0.08% | 0.12% | 0.23% | -0.13% | |
| JPY | -0.51% | -0.24% | -0.38% | -0.31% | -0.27% | -0.17% | -0.52% | |
| GUJAT | -0.17% | 0.08% | -0.08% | 0.31% | 0.05% | 0.15% | -0.19% | |
| EUR | -0.22% | 0.04% | -0.12% | 0.27% | -0.05% | 0.11% | -0.24% | |
| CAD | -0.32% | -0.07% | -0.23% | 0.17% | -0.15% | -0.11% | -0.38% | |
| INR | 0.03% | 0.27% | 0.13% | 0.52% | 0.19% | 0.24% | 0.38% |
The heat map shows the percentage changes of major currencies against each other. The base currency is selected in the left column, while the quote currency is selected in the top row. For example, if you choose the US dollar in the left column and move along the horizontal line to the Japanese yen, the percentage change shown in the box will represent USD (base)/JPY (quote).
The Indian rupee came under pressure as equity outflows accelerated last week and importers’ hedging outpaced exporters’ activity amid growing depreciation expectations. However, a possible free trade agreement between India and the European Union (EU) this week could provide a counter-cyclical buffer by boosting exports of pharmaceuticals, textiles and chemicals, while improving regulatory clarity and attracting foreign flows, helping to limit downside risks to the rupee.
The USD/INR pair may find early support from slightly positive sentiment in the US and Asian markets, as well as near-term optimism sparked by the US administration’s remarks on possible tariff cuts. The United States could remove punitive 25% tariffs imposed on India in mid-2025 for the purchase of Russian oil, following comments by US Treasury Secretary Scott Bessent on the sidelines of the World Economic Forum in Davos last week, which fueled speculation of an easing of trade tensions.
The RBI’s INR 1 lakh crore liquidity infusion through government bond purchases is expected to stabilize financing conditions. With the Union Budget and clarity on US-India trade deadlines, markets are expected to remain cautious, according to Reuters.
US Dollar Remains Under Pressure Amid Growing Political Uncertainty and Shutdown Risks
- The US Dollar Index (DXY), which measures the value of the US dollar against six major currencies, remains moderate and is trading around 97.00 at the time of writing. The greenback remains under pressure from growing political uncertainty, with the US government heading towards a possible partial shutdown.
- Senate Democratic leader Chuck Schumer has vowed to oppose a funding package that includes money for the Department of Homeland Security, leaving Congress facing a Jan. 30 deadline to avoid a shutdown.
- Traders may also become cautious amid uncertainty surrounding the Federal Reserve (Fed). U.S. President Donald Trump said last week he would soon announce his nominee to replace Fed Chairman Jerome Powell, fueling speculation that the next president could favor a faster cut in interest rates.
- Trump has warned he would impose 100% tariffs on Canadian goods if Ottawa strikes a trade deal with China, the BBC reported this weekend. In response, Canadian Prime Minister Mark Carney said Sunday that Canada had no plans to enter into a free trade deal with China, saying its recent deal with Beijing had only reduced tariffs in a few recently affected sectors.
- US President Donald Trump said he would drop tariffs on goods from European countries opposing his efforts to take over Greenland. He earlier said there was “no turning back” on his ambitions on Greenland, alongside his earlier threats to impose new 10% tariffs on eight European Union (EU) countries.
- U.S. gross domestic product grew at an annualized rate of 4.4% in the third quarter of 2025, slightly more than expected and the previous figure of 4.3%. Additionally, initial jobless claims came in at 200,000 last week, below the market consensus of 212,000.
- The U.S. personal consumption expenditures (PCE) price index increased to 2.8% year-over-year in November, up from 2.7% in October. On a monthly basis, the PCE price index increased by 0.2%. The annual core PCE price index, the Federal Reserve’s (Fed) preferred inflation gauge, rose 2.8% in November, following October’s 2.7% increase in line with market expectations.
- Fed officials have indicated there is no urgency to ease policy further until there is clearer evidence that inflation is moving sustainably toward the 2% target. Analysts at Morgan Stanley have revised their outlook for 2026, now predicting a rate cut in June followed by another in September, compared to their previous forecast of cuts in January and April.
Technical Analysis: USD/INR remains near record highs near 92.00
USD/INR is trading around 91.80 at the time of writing this article. Technical analysis of the daily chart suggests a persistent bullish bias as the pair rises in the ascending channel pattern. However, the 14-day relative strength index (RSI) at 78 suggests the asset is overbought, signaling tight momentum and increased risk of a pullback or consolidation in the near term.
Immediate resistance lies at the all-time high of 91.96 recorded on January 23, followed by the upper limit of the ascending channel around 92.10. On the downside, the nine-day exponential moving average (EMA) at 91.28 could serve as primary support. A break below the short-term average would expose the area around the ascending channel below 90.20.
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