USD/INR edges down on likely FIIs return to Indian markets

• The Indian Rupee edges up to near 91.10 against the US Dollar at open on massive FIIs buying on Monday.
• US-Iran nuclear talks and India’s Q4 GDP data to be key triggers for the Indian Rupee.
• US President Trump threatens higher duties on countries if they don’t honor trade deals.

The Indian Rupee (INR) ticks up against the US Dollar (USD) in the opening trade on Tuesday. The USD/INR pair edges down to near 91.10 on the expectation that the Reserve Bank of India (RBI) has intervened in spot and forward markets to support the Indian Rupee.

The Indian central bank is likely selling US dollars on Tuesday to prevent the rupee from falling past the psychologically important 91-per-dollar mark, Reuters reported.

In addition to RBI’s likely intervention, a strong inflow of foreign funds into the Indian stock market on Monday has also supported the Indian Rupee. On Monday, Foreign Institutional Investors (FIIs) bought shares worth Rs. 3,483.70 crores, the second-highest amount of buying this month, and turned the entire month net positive in terms of foreign flows. So far in February, FIIs have purchased shares worth Rs. 1,472.46 crore.

This week, major triggers for the Indian Rupee will be nuclear talks between the United States (US) and Iran on Thursday, and India’s Q4 Gross Domestic Product (GDP) data on Friday.

The outcome of US-Iran nuclear talks will have a significant impact on the oil price. Currencies of countries that lack oil reserves and rely heavily on their imports to cover their energy needs remain highly sensitive to changes in the oil price.

Ahead of US-Iran talks, President Donald Trump has threatened Tehran through a post on Truth Social that it will be a very bad day for the country and its people if they don’t reach a deal.

Meanwhile, the US Dollar (USD) extends its recovery move on the expectation that volatility sparked by the US Supreme Court’s (SC) verdict against President Donald Trump’s tariff policy won’t last long. During the press time, the US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, trades 0.2% higher to near 97.90.

Financial market participants believe that President Donald Trump has several alternatives to keep tariffs intact and has also threatened countries against “playing games with existing trade agreements” after the court’s verdict.

On Friday, the US Supreme Court ruled that Trump exceeded his authority by invoking economic emergency powers to back his tariff agenda and blocked additional import duties. In response, Trump has already announced 15% global tariffs.

Technical Analysis: USD/INR holds key 20-day EMA

USD/INR trades marginally lower at open around 91.10. Price holds above the 20-day Exponential Moving Average at 90.9273, keeping a mild bullish bias.

The 20-day EMA has flattened through recent sessions and is starting to turn higher, suggesting buyers retain control while above this gauge and could extend the advance toward the January 23 low of 91.61. While a pullback below the average could shift bthe ias back into a range.

The 14-day Relative Strength Index (RSI) continues to wobble inside the 40.00-60.00 range, indicating a sideways trend.