USD/INR: Rupee Slips to Record Low Past 86 Mark Amid Hawkish Fed Outlook

On January 13, 2025, the Indian rupee traded up at 86.31 to the U.S. dollar, against 85.97 at the previous close. The rupee had hit a record low of 85.97 against the dollar on Friday, surpassing its previous record low of 85.86 hit earlier last week.

Rupee Drops to Record Low as Dollar Strengthens

The dollar index soared to a 2 year high, nearing 110, while the 10-year U.S. yield hit a 14-month peak yesterday.

The dollar’s strength is bolstered by strong U.S. economic data, with employers adding 256,000 jobs last month, well above the expected 160,000. Additionally, the unemployment rate unexpectedly dropped to 4.1%.

According to reports, this data is likely to lower the chances of near-term Fed rate cuts. In addition to U.S. economic data, the dollar is receiving support from the potential tariffs that U.S. President-elect Donald Trump is expected to impose on other nations.

Important U.S. Economic Events Ahead

Investors are keeping a close eye on important events ahead, such as the U.S. Inflation data on January 15, 2025 , and President-elect Donald Trump’s inauguration on January 20, 2025.

Brent Crude Oil Gains

Oil prices continued to climb for a third consecutive session on Monday, with Brent surpassing $81 per barrel, reaching its highest level in over 4 months.

This rise is attributed to expectations that broader U.S. sanctions will impact Russian crude exports to major buyers like China and India. The Brent crude futures traded 1.63% higher, to $81.05 on Monday.

Meanwhile, the Indian stock market remained under pressure as foreign investors sold a net $818.5 million worth of Indian shares on January 10, according to NSDL data.

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