- summary:
- USDINR has risen marginally in the past 24 hours, but Trump’s policy comments will certainly ruffle feathers in the coming days.
USDINR rose on Tuesday as traders digested US President Donald Trump’s inauguration speech. Trump has given hints that he will waste no time imposing tariffs on imports into the United States, but has signed no executive order to that effect. Trump signed nearly 50 executive orders and canceled 78 orders issued by Joe Biden on the first day of his second term in office. However, there could be more on the way as at least 100 are promised.
Trump and oil prices affect the US dollar
The decision to slow down the imposition of trade-related tariffs could be interpreted as Trump’s way of making room for broader consultations. This may calm traders’ nerves in the coming days and help keep the USDINR on a more stable path. The currency pair was trading at 86.53, an increase of 0.3% on the daily chart.
The decline in crude oil prices has injected some strength into the rupee. The commodity has lost about 3.5% of its value in the past five days, partly due to the ceasefire between Israel and Hamas. India is the third largest importer of crude oil in the world, and this decline has eased demand for the dollar.
However, the US dollar remaining above 86.00 in the past six sessions has created bullish sentiment. However, the Reserve Bank of India (RBI) is expected to intervene to reduce pressure on the rupee. The absence of high-impact data from India and the US means USDINR is likely to remain on an upward trajectory in the near term.
US dollar forecast
USDINR is pivoting at 86.43 and an uptrend will prevail if the move remains above this level. Immediate resistance is likely to be at 86.60. However, extended bullish momentum will break above this level and could test the second resistance at 86.68.
Conversely, sellers will take control if the currency pair drops below 86.43. This is likely to see the first support reached at 86.40. Meanwhile, a break below this level will invalidate the bullish narrative. Also, stronger downside momentum could extend losses to test the second support at 86.33.
