USDINR Decline Extends, Indian Equities On the Way Up

The USDINR currency pair was down on Monday, extending its decline to the eighth session out of the last ten. The currency pair hit a year-to-date low of 85.48, driven by recovery of the Indian equities markets, underlined by increased foreign inflows. In addition, the latest macroeconomic data from India added support to the ruppee.

India’s benchmark indices, the Nifty 50 Index and Sensex Index rose by 4.4% and 4.5% successively in the last five sessions, and are both by more than 3% in the last month. That denotes restoration of positive investor sentiment in the Indian equities, after declining substantially between September 2024 and February 2025.

Meanwhile, India’s S&P Global Manufacturing Purchasing Managers Index (PMI) reading rose to 57.6 in March, up from February’s 56.3. That adds to the downward momentum on USDINR. However, the Services PMI fell to 57.7 from 59.0, and that will limit the rupee’s upside.

In addition, crude oil prices have been rising in the last week in response to Middle East geopolitical risk, and that could see India, the world’s third-largest importer of oil, spend more dollars. This scenario could also limit gains by the rupee and provide support to USDINR.

However, US President Donald Trump bumped up markets following his statement that he was open to readjust his stance on the planned “reciprocal” tariffs. That could reduce the fear sentiment and increase inflow into Indian equities.

USDINR Prediction

USDINR pivots at 85.80 and resistance at that level will favour the sellers to be in control. The first support will likely be at 85.46, but a stronger downward momentum will break below that level and potentially test 85.16.

On the other hand, the momentum could shift to the upside if the pair breaks above 85.80. With that, USDINR will likely move higher to encounter the first resistance at 86.00. The downward momentum will be invalid if the exchange rate breaks above that level. In addition, that could strengthen the upward momentum to test 86.25.

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