USD/INR: Indian Rupee at 85.79 Trades Near Record Low; RBI Eyed

On January 06, 2025, the Indian rupee traded at 85.79 to the U.S. dollar, up nearly 0.03% against 85.77 at the previous close yesterday. The currency hit its all-time low of 85.8075 on December 27. As per news reports, there was a significant dollar-selling intervention by the RBI.

Firm Dollar Index

The Asian currencies remained mostly stable, while the dollar index eased slightly to 108.8, still hovering near a two-year high reached last week.

Aiding dollar strength was the U.S. job release that shows a robust labour market, with unemployment claims dropping to an 8-month low.

The Federal Reserve too has indicated that it will be more cautious in cutting interest rates as inflation remains above its 2% annual target and the economy remains strong.

Key U.S. Economic Events 

Investors are now anticipating the U.S. December jobs report, set for release next Friday, as well as the U.S. inflation data, scheduled for January 15.

Donald Trump will take charge as the US President in an iconic Inauguration event on January 20, with attention on how he addresses the pressing issues facing the nation and the world.

The US Federal Open Market Committee (FOMC) which decides on the US monetary policy will give its interest rate decision on January 29, 2025.

The expectation that the Fed will maintain higher interest rates for an extended period, along with anticipated policies from U.S. President-elect Donald Trump, has strengthened the dollar and U.S. bond yields lately.

Foreign Investors Net Buyers of Indian Shares

Brent crude futures are 0.26% up, at $76.31 per barrel as of January 6, 2025. Meanwhile, NSDL data revealed that foreign investors bought a net $193.9 million worth of Indian shares and sold Indian bonds valued at $64.7 million on January 2, 2025.

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