The Indian Rupee (INR) weakened early Wednesday in European trading. Rising crude oil prices continue to pressure the currency, as India is the world’s third-largest oil consumer. Higher oil costs typically weigh on the Rupee’s value.
However, a softer US Dollar following weaker US economic data may limit further losses for the INR. Analysts from BofA Securities expect Indian markets to attract strong foreign investment once trade tariff concerns ease. This inflow could support the Rupee.
Market participants are also watching the US ISM Services PMI data due later today. In India, the Reserve Bank of India (RBI) is expected to announce its third consecutive 25 basis points interest rate cut on Friday. Meanwhile, the US May employment report remains a key focus.
The Organisation for Economic Cooperation and Development (OECD) forecasts India’s economy to grow by 6.3% in 2025-26 and 6.4% in 2026-27. David Hauner, head of emerging markets fixed income at BofA Securities, said India stands out in Asia for investment due to strong growth drivers.
In the US, job openings rose to 7.39 million in April, exceeding expectations. However, Fed officials warn that ongoing trade policies remain a major risk to economic stability. Chicago Fed President Austan Goolsbee emphasized the need to assess tariffs’ impact over time.
The USD/INR pair is trading near its 100-day Exponential Moving Average (EMA). A clear break above this level may push the pair higher. The 14-day Relative Strength Index (RSI) near 55 suggests upward momentum.
Resistance levels to watch are 86.10 (May 22 high), 86.71 (April 9 high), and 87.30 (March 12 high). Support lies at 85.30 (June 3 low), with further downside possible to 85.04 (May 27 low) and 84.61 (May 12 low) if bearish pressure increases.
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