USD/INR ticks lower at open as US SC strikes down Trump’s tariff policy

FXStreetFeb 23, 2026 5:25 AM

The Indian Rupee edges up against the US Dollar as the latter weakens after the US SC’s ruling against Trump’s tariff policy.
US President Trump calls SC’s verdict against his tariff policy “disappointing” and announces 15% global tariffs.
The invalidation of the US trade policy has improved India’s competitive advantage in the global market.

The Indian Rupee (INR) opens marginally higher against the US Dollar (USD) at the start of the week. The USD/INR ticks down to near 90.86 as the US Dollar (USD) has come under pressure, following the United States (US) Supreme Court’s (SC) ruling against President Donald Trump’s tariff policy.

In a verdict on Friday, the US SC stated that President Trump overstepped his authority by invoking rights under the International Emergency Economic Powers Act (IEEPA) to impose wide-ranging tariffs on trading partners.

In response, US President Trump stated that he was “ashamed of certain members of the court” and announced 15% global tariffs to keep trade pressures intact.

The event has weighed on the US Dollar, raising questions about the credibility of US policies. As of writing, the US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, trades 0.35% lower to near 97.45.

In addition to US trade policy uncertainty, weak Q4 Gross Domestic Product (GDP) and S&P Global Purchasing Managers’ Index (PMI) data for February have also weighed on the US Dollar. The data showed on Friday that the US GDP grew at an annualized pace of 1.4%, slower than the 3% estimate and the prior release of 4.4%. S&P Global Composite PMI arrived lower at 52.3 from 53.0 in January as both the manufacturing and service sector activity grew moderately.

Meanwhile, the US SC’s verdict against Trump’s tariff policy has put the Indian economy in a better position. The imposition of 15% global tariffs by Trump after SC invalidating import duties backed by invoking IEEPA turns out to improve the competitive advantage of Indian exporters in the global market, as duties confirmed in the latest US-India trade talks on New Delhi were at 18%.

Also, the scheduled visit of Indian trade negotiators to the US to accelerate deal formalities, which was expected this week, has been delayed for an uncertain period.

Even as the US and India have reached an agreement, the absence of improvement in the sentiment of overseas investors toward the Indian stock market could turn out to be a serious drag on the Indian Rupee. So far in February, Foreign Institutional Investors (FIIs) have offloaded their stake worth Rs. 2,011.24 crore despite the trade deal confirmation on February 2. On Friday, FIIs also turned out to be net sellers and sold shares worth Rs. 934.61 crore.

Technical Analysis: USD/INR strives to hold 20-day EMA

USD/INR edges down to near 90.85 in the opening trade. Price holds just above the 20-day Exponential Moving Average (EMA) at 90.888, while the average flattens after a recent downswing, signaling consolidation. The slight uptick in the EMA suggests initial support developing beneath the spot.

The 14-day Relative Strength Index (RSI) inside the 40.00-60.00 range indicates a broader sideways trend.

The 20-day EMA remains the immediate pivot for directional cues at 90.8797, with sustained acceptance above it keeping a mild bullish bias intact. A clearer trend would emerge if the EMA slope steepens; otherwise, price action would stay contained around this moving average.

(The technical analysis of this story was written with the help of an AI tool.)

Indian Rupee FAQs

What are the key factors driving the Indian Rupee?

The Indian Rupee (INR) is one of the most sensitive currencies to external factors. The price of Crude Oil (the country is highly dependent on imported Oil), the value of the US Dollar – most trade is conducted in USD – and the level of foreign investment, are all influential. Direct intervention by the Reserve Bank of India (RBI) in FX markets to keep the exchange rate stable, as well as the level of interest rates set by the RBI, are further major influencing factors on the Rupee.

How do the decisions of the Reserve Bank of India impact the Indian Rupee?

The Reserve Bank of India (RBI) actively intervenes in forex markets to maintain a stable exchange rate, to help facilitate trade. In addition, the RBI tries to maintain the inflation rate at its 4% target by adjusting interest rates. Higher interest rates usually strengthen the Rupee. This is due to the role of the ‘carry trade’ in which investors borrow in countries with lower interest rates so as to place their money in countries’ offering relatively higher interest rates and profit from the difference.

What macroeconomic factors influence the value of the Indian Rupee?

Macroeconomic factors that influence the value of the Rupee include inflation, interest rates, the economic growth rate (GDP), the balance of trade, and inflows from foreign investment. A higher growth rate can lead to more overseas investment, pushing up demand for the Rupee. A less negative balance of trade will eventually lead to a stronger Rupee. Higher interest rates, especially real rates (interest rates less inflation) are also positive for the Rupee. A risk-on environment can lead to greater inflows of Foreign Direct and Indirect Investment (FDI and FII), which also benefit the Rupee.

How does inflation impact the Indian Rupee?

Higher inflation, particularly, if it is comparatively higher than India’s peers, is generally negative for the currency as it reflects devaluation through oversupply. Inflation also increases the cost of exports, leading to more Rupees being sold to purchase foreign imports, which is Rupee-negative. At the same time, higher inflation usually leads to the Reserve Bank of India (RBI) raising interest rates and this can be positive for the Rupee, due to increased demand from international investors. The opposite effect is true of lower inflation.

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