- Indian Rupee (INR) rises after earlier declines
- Indian Rupee sees steepest fiscal annual decline since 2011/12
- The US Dollar (USD) is rising versus major peers to a 10-month high
- US data is also in focus this week
The US dollar-to-Indian rupee (USD/INR) exchange rate is falling after gains last week. The pair rose 0.52% in the previous week, settling on Friday at 94.78. At 17:30 UTC on Monday, the pair is down 0.48% to 94.33, trading between 93.24 and 95.58.
The Indian rupee fell to a record low against the US dollar in a volatile session on Monday, marking the end of a difficult fiscal year in which trade concerns, geopolitical tensions, and unfavourable capital flows weighed heavily on the South Asian currency.
The rupee fell to a low of 95.21 before likely intervention from the Reserve Bank of India helped it recover to around 94.83.
The currency dropped 11% over India’s fiscal year from April to March, marking its steepest annual decline since 2011/12.
The rupee has faced sustained pressure over the past 12 months as foreign investors continued to sell Indian equities and President Trump’s policies added to volatility across global financial markets.
Overseas investors sold more than $19 billion worth of Indian stocks over the past year, with selling accelerating in March as oil prices surged in the wake of the Iran conflict, raising concerns over India’s vulnerability as a major net energy importer.
The US dollar is rising across the board. The US Dollar Index, which measures the currency against a basket of major peers, is up 0.40% at 100.55, marking a fifth straight day of gains.
The US dollar is also starting the week on a strong footing, rising to its highest level since May 2025 and approaching a 10-month high as the conflict with Iran shows little sign of de-escalation.
Investors remain focused on the implications for global growth and the monetary policy outlook as oil prices climb to levels not seen since 2022.
However, attention is beginning to shift more towards how higher energy costs could weigh on economic activity and potentially limit the Federal Reserve’s ability to tighten policy further.
As a result, the market-implied probability of a Fed rate hike in 2026 has fallen to below 20%, down from around 35% last week.
This week’s US economic calendar is busy, with ISM manufacturing and services PMIs due on Wednesday and Friday, alongside the closely watched nonfarm payrolls report.
