USD/INR continues to trade sideways amid US trade policy uncertainty

• The Indian Rupee ranges vs. the US Dollar amid US trade policy uncertainty ahead of US-Iran nuclear talks.
• US Trade Representative Greer said that global tariffs could be raised to 15% or higher on some countries.
• India’s Q4 GDP is estimated to have grown at a moderate pace of 7.2% Year-on-Year (YoY).

The Indian Rupee (INR) trades flat in its opening trade against the US Dollar (USD) on Thursday. The USD/INR pair continues to oscillate in a tight range near 91.00 as investors seek clarity on the United States (US) trade policy outlook.

On Wednesday, US Trade Representative Jamieson Greer said that Washington could raise tariffs to 15% or above on some nations from the recently announced 10% duties. Greer didn’t disclose the names of the US trading partners that could be charged higher tariffs.

US President Donald Trump imposed a 10% global levy to offset the Supreme Court’s (SC) ruling against his tariff policy. On Friday, the SC accused Trump of invoking emergency economic powers to back his tariff agenda and invalidated the so-called reciprocal duties.

The uncertainty over the US trade policy outlook has been a major drag on the US Dollar. As of writing, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, trades with caution near 97.50.

On the monetary policy front, traders remain confident that the Federal Reserve (Fed) will leave interest rates unchanged at the March and April policy meetings in the range of 3.50%-3.75%, according to the CME FedWatch tool.

In Thursday’s session, investors will mainly focus on the outcome of nuclear talks between the US and Iran in Geneva. The impact of the outcome of nuclear talks would be significant on the oil prices, which could influence the next move in the Indian Rupee.

Currencies from countries, such as India, that rely heavily on imports of oil to fulfill their energy needs, remain highly sensitive to changes in oil prices.

Meanwhile, improving sentiment of foreign investors toward the Indian stock market could boost the Indian Rupee’s appeal going forward. So far in February, Foreign Institutional Investors (FIIs) have remained net buyers and have bought shares worth Rs. 4,361.57 crore, after remaining sellers for seven straight months.

Signs of FIIs returning to the Indian equity market stem from improving trade relations between the US and India. Earlier this month, the US and India acknowledged a trade deal confirmation in which Washington reduced tariffs on imports from New Delhi to 18% from 50% (which included punitive tariffs for buying oil from Russia).

On the domestic front, investors await the Q4 Gross Domestic Product (GDP) data, which will be released on Thursday. The GDP data is expected to show that the economy expanded at an annualized pace of 7.2%, slower than 8.2% growth seen in the third quarter of 2025.

Technical Analysis: USD/INR remains sideways around 91.00

USD/INR trades flat at around 91.00 as of writing. The pair holds marginally above the 20-day Exponential Moving Average, keeping a cautious bullish bias in place while upside momentum remains contained. Price action has stabilized after the early-month surge, and the flattening of the 20-day EMA reflects a moderating trend rather than an outright reversal.

The 14-day Relative Strength Index (RSI) continues to wobble inside the 40.00-60.00 range, demonstrating signs of volatility contraction.

Immediate support emerges at the 20-day EMA near 90.94, with a break below exposing the recent reaction low at 90.58 and then the February 3 low at 90.15 as deeper support. On the topside, initial resistance stands at the January 22 low of 91.35, followed by the January 28 low of 91.66.

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