The Indian Rupee is steady against the US Dollar at around 88.85. Traders are waiting for India’s retail inflation figures for October. Delays in trade talks between the US and India are impacting the Rupee, while President Trump hints at possible future tariff cuts on Indian products. Currently, the USD/INR pairs trade around 88.85. Both countries seem close to a trade agreement, although nothing is officially announced yet. Investors are watching for India’s Consumer Price Index (CPI) data, expecting a modest yearly increase of 0.48%, down from September’s 1.54%.

Foreign Institutional Investors

Foreign Institutional Investors have sold shares worth Rs. 4,114.85 crore due to the trade deal delays. The US Dollar is stable, with the Dollar Index at around 99.65, as the US Senate prepares a funding bill to avoid government shutdowns. There’s a 62.4% chance that the Federal Reserve will cut interest rates in December. The USD/INR remains above the 20-day EMA, with support at 87.07 and resistance at 89.12. Inflation is a key concern. Rising inflation can boost a currency’s value as interest rates climb, while lower inflation can weaken it. Gold prices also react to inflation trends; higher interest rates can make gold less appealing. While the USD/INR pair is stable at 88.85, we see a chance for a breakout. The immediate focus is on India’s October retail inflation data, due tomorrow, November 12th, 2025. If the inflation number is lower than expected, it might heighten the chances of the Reserve Bank of India cutting interest rates, which could weaken the Rupee.

Recent Wholesale Price Index Data

Recent wholesale price index (WPI) data from the Ministry of Commerce and Industry shows a significant drop in food and fuel prices last month. This supports the expectation of slower consumer inflation, forecasted to decrease to 0.48% from 1.54%. If this trend continues, the RBI might have more flexibility to ease policies, after keeping rates steady in October 2025. On the other hand, the US Dollar faces its own challenges, as the market expects a 62.4% chance of a Federal Reserve rate cut in December. Fed officials have shown concern about a weakening job market, highlighted by the latest JOLTS report from November 4th, 2025, which noted job openings fell to 8.5 million, the lowest since early 2023. The market is under tension from these conflicting forces, with a potentially weaker Rupee and a weaker Dollar. Uncertainty over a US-India trade deal has led foreign investors to sell Indian stocks, as seen with the Rs. 4,114.85 crore net sale on Monday. However, if a trade deal is announced unexpectedly, the Rupee could strengthen and the USD/INR pair could drop. With these significant upcoming events, implied volatility in USD/INR options is likely to rise in the coming days. Traders might consider strategies that profit from large price movements in either direction. Buying options, such as a long straddle or strangle, could be a good approach to position for a breakout from the current narrow range. We encountered a similar consolidation phase in late 2023 when uncertainty about global central bank policies caused increased currency volatility. The current movement above the 20-day EMA of 88.63 could hint at a decisive shift. A breakout above the all-time high of 89.12, or below the important support level of 87.07, seems more likely once the new data is released. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now