The Indian Rupee Falling Against the US Dollar at the start of the early European trading session on Thursday. Higher USD, low sentiment on local equities, and steady capital flight are other factors that are pushing the factor. Company investors are eagerly waiting for comments from the US Federal for a new direction.

God help INR, though the RBI may intervene by selling dollars to support the INR. Pundits now anticipate further depreciation of the INR, with MUFG anticipating 86.8 per dollar this quarter, and Citigroup expecting a drop to 86.35. On Wednesday, the dollar-to-rupee pair declined 0.2% to close below 85.8550 for the first time. After the postponement, India’s projected growth over the subsequent years restrained to reach 8.2% in FY 24 and further reduced to 6.4 % in FY 25.

Minutes of the Federal Reserve’s December meeting suggested that whereas inflation may well start to decline, threats of sustained inflation still linger. The latest materials reflected that US jobless claims decreased to 201,000, which were more promising. Asymptotes In another report by the Fed’s Governor, inflation should decline in 2025 with potential low interest rates.

But even as INR has observed a bearish trend, the outlook for USD/INR is bullish with support having been offered by the 100-day Exponential Moving Average. However, the 14-day Relative Strength Index is a target of caution for those seeking to buy. There is a key resistance level at 85/95-86/00 which, if broken, may push the price to 86/50. On the other hand, support is identified at $85.65, which was the January 7 low. If this level is violated, the next level of support which forms the 100-day EMA may be 84.51.

Given the importance of trade, the RBI actively engages in foreign exchange markets to keep the currency stable. This helps protect Indian importers and exporters from excessive risk amid currency fluctuations. The RBI buys and sells Rupees at strategic levels and uses derivatives to manage its positions.