The Indian rupee (INR) has experienced a mix of influences in recent weeks, reflecting a balance of risks as traders respond to external economic pressures. Following the announcement of a 26% reciprocal tariff by the U.S. on goods from Taiwan, concerns about U.S. economic growth surfaced, leading to a downward movement in the dollar, which in turn affected the rupee’s trajectory.
Recent geopolitical tensions further complicated matters, particularly with India's air strikes against Pakistan escalating regional instability. While these developments have raised volatility in the foreign exchange markets, analysts suggest the overall risks for the INR remain broadly balanced at its current level.
From a technical perspective, the INR to USD exchange rate stands at 0.011668, aligning closely with its three-month average and exhibiting a stable trading range of just 3.0%. Meanwhile, the INR to EUR is currently at 0.009952, which is 2.7% below its three-month average, reflecting a relatively stable fluctuation within a 7.3% range.
The INR to GBP pair has reached 14-day highs near 0.008589 and, despite being 1.3% below its three-month average, remains stable in a narrow channel. In contrast, the INR to JPY is experiencing a notable uptick, trading at 30-day highs around 1.7138, which is 1.6% above its three-month average and within a stable trading range.
The ongoing uncertainty stemming from surging energy prices is particularly significant for the Indian market, as India is the third-largest oil consumer globally, heavily reliant on imports. Analysts warn that rising crude oil prices are likely to add inflationary pressures, influencing potential interest rate hikes. As the dollar continues to surge against Asian currencies, including the INR, the market may see heightened volatility due to the broader implications of U.S. tariff policies.
In summary, while recent volatility and geopolitical tensions present challenges, the technical positioning of the INR suggests a phase of steady trading, albeit with caution advised for future developments that may arise from both local events and the U.S. economic landscape.