USD/INR: Indian Rupee Weakens Slightly Amid Dollar Demand on January 17, 2025; RBI Likely Intervenes

On January 17, 2025, the Indian rupee traded at 86.58 to the U.S. dollar, against 86.55 at the previous close. The rupee remained under pressure due to heightened demand for dollars at the daily reference rate, signalling strong dollar bids.

Dollar Weakens, Treasury Yields Fall

The dollar index stood at 109, marking a drop for the fourth consecutive session on Thursday. Meanwhile, the 10-year U.S. Treasury yield hovered around 4.60% in Asian trading, following a 5-basis-point decrease in the previous session.

This decline in Treasury yields came after Federal Reserve Governor Christopher Waller suggested that three or four rate cuts could be possible this year if U.S. economic data weakens further. The median projections of Fed officials in December had anticipated two rate cuts in 2025.

Important U.S. Economic Events Ahead

U.S. inflation data release shows the Consumer Price Index (CPI) increased by 2.9% in December compared to the previous year, marking the highest rise since July, according to the U.S. Labor Department’s report on January 15. This marked the third consecutive rise following a drop to a 3.5-year low of 2.4% in September.

Investors are keeping a close eye on important events ahead, such as President-elect Donald Trump’s inauguration on January 20, 2025.

Brent Crude Oil Gains

Oil prices climbed on Friday, heading for their fourth straight weekly gain, as new U.S. sanctions on Russian energy exports disrupted supply, raising spot prices and shipping costs. Brent crude futures increased by 44 cents, or 0.5%, to $81.73 per barrel.

Meanwhile, The Indian stock market remained under pressure on January 17, 2025, with continued selling by foreign institutional investors (FIIs). On January 16, domestic institutional investors (DIIs) purchased shares worth ₹2,928 crore, while foreign institutional investors (FIIs) sold shares worth ₹4,341 crore, according to provisional data from NSE.

For the year, FIIs have net sold ₹43,251 crore worth of shares, while DIIs have net bought ₹46,793 crore worth of shares.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.