USD/INR climbs at the start as markets await US NFP report

Indian Rupee Weakens as US Dollar Gains Strength Ahead of Key US Jobs Data

On Friday, the Indian Rupee (INR) opened lower against the US Dollar (USD), with the USD/INR exchange rate climbing close to 90.25. The US Dollar remains robust in anticipation of the December Nonfarm Payrolls (NFP) report from the United States, scheduled for release at 13:30 GMT.

Currently, the US Dollar Index (DXY), which measures the Greenback’s performance against a basket of six major currencies, is trading near a four-week peak around 98.90.

The upcoming US NFP figures for December are expected to play a pivotal role in shaping market expectations for the Federal Reserve’s future policy moves, especially since previous employment data was skewed by a federal government shutdown.

Analysts predict the latest jobs report will indicate the creation of 60,000 new positions, a slight decrease from November’s 64,000. The unemployment rate is forecast to fall to 4.5%, down from the previous 4.6%.

According to the New York Fed bank’s December Survey of Consumer Expectations, respondents expressed the lowest confidence in finding employment if jobless since the survey began in 2013, as reported by Reuters.

Market participants will also closely watch the Average Hourly Earnings data in the NFP release, as it provides insights into wage growth and inflation trends. Wages are projected to have increased at an annual rate of 3.6%, up from 3.5% in November, while monthly wage growth is estimated at 0.3%, compared to the previous 0.1%.

Market Highlights: Investors Eye India’s Upcoming Retail Inflation Data

• The recent rise in USD/INR is partly attributed to the weakening Indian Rupee, pressured by ongoing foreign investor outflows from Indian equities amid renewed trade tensions between the US and India.
• In January so far, Foreign Institutional Investors (FIIs) have been net sellers on five out of six trading sessions, withdrawing a total of Rs. 8,017.51 crore. Throughout 2025, FIIs were net sellers in eight of the twelve months.
• Trade frictions have escalated after President Donald Trump threatened to impose higher tariffs on Indian imports due to India’s continued oil purchases from Russia.
• This week, US Senator Lindsey Graham announced that President Trump has approved a bill proposing 500% tariffs on nations trading with Russia, according to the Times of India.
• Such measures could further erode overseas investor confidence in Indian stocks. However, the effect of increased tariffs on Indian exports to the US may be limited, as India’s current import duty rate of 50% is already among the highest for US trading partners, reducing the competitiveness of Indian goods.
• Domestically, attention will turn to India’s retail Consumer Price Index (CPI) data for December, set for release on Monday. The CPI is expected to rise at an annual rate of 1.5%, up from 0.71% in November, but still below the Reserve Bank of India’s (RBI) target range of 2%-6%.

USD/INR Technical Overview: Pair Hovers Near 20-Day EMA

The USD/INR pair is currently trading around 90.30. The 20-day Exponential Moving Average (EMA) has edged up to 90.2157, with the spot rate holding above this level, maintaining a slight bullish tone. The short-term trend has strengthened after a brief pause, supporting the ongoing upward momentum.

The 14-day Relative Strength Index (RSI) stands at 53, indicating neutral territory but showing improvement from previous readings, which suggests a modest pickup in momentum.

If the pair closes above the 20-day EMA, it could reinforce bullish momentum and potentially open the door for a move toward the record high of 91.55. Conversely, failure to surpass this level may result in a pullback, with the possibility of a deeper decline toward the December 19 low of 89.50.

(This technical analysis was generated with the assistance of AI tools.)