The Indian Rupee (INR) faces selling pressure against the US Dollar (USD) during afternoon trading hours in India on Friday. The USD/INR pair rises to near 92.70 amid caution ahead of the United States (US) Consumer Price Index (CPI) data for March at 06:00 pm IST (12:30 GMT) and the outcome of negotiations between the United States (US) and Iran on the 10-point peace proposal in Pakistan over the weekend.
During the press time, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, trades flat around 98.75.
US-Iran talks, CPI data awaited
Investors will pay close attention to the US inflation data for March, as it will reflect the impact of elevated energy prices, which are driven by the war in the Middle East. The US CPI report is expected to show that the headline inflation accelerated to 3.3% Year-on-Year (YoY) from 2.4% in February. On a monthly basis, the headline inflation is expected to have grown at a faster pace of 0.9% against the previous reading of 0.3%.
The US core CPI – which excludes volatile food and energy items – is estimated to have risen 2.7% YoY, faster than the prior release of 2.5%. Month-on-Month (MoM) core CPI is expected to arrive higher at 0.3% from 0.2% in February.
However, the influence on market expectations for the Federal Reserve’s (Fed) monetary policy outlook is expected to come more from the outcome of US-Iran permanent ceasefire talks in Pakistan than from the inflation data.
The impact of higher oil prices on US inflation would be counted as a one-time event if Iran agrees to let things return to normal near the Strait of Hormuz, whose closure led to an energy supply crisis and prompted inflation expectations globally. Fed members are unlikely to be encouraged to deliver hawkish remarks on the US interest rate outlook due to a one-off increase in inflation.
Iran seized control of the Strait of Hormuz as part of retaliation against the killing of its major leaders by combined military attacks from Israel and the US.
Meanwhile, Iran has demanded recognition of its authority over the Strait of Hormuz, as one of its requirements, for a permanent ceasefire.
FIIs’ average selling remains significantly lower after Iran’s temporary truce.
Despite the announcement of a two-week ceasefire between the US and Iran, overseas investors continue to dump their stake in the Indian stock market. However, recent data shows that the selling pressure has cooled down significantly.
Since the announcement of the US-Iran temporary truce on early Wednesday, Foreign Institutional Investors (FIIs) have offloaded their stake at an average of Rs. 2,261.58 crore on Wednesday and Thursday, a little over one-fourth of the average selling of Rs. 8,780.39 crore recorded in trading days gone by.
Technical Analysis: USD/INR trades close to over three-week low of 92.20
USD/INR trades higher at around 92.70 as of writing. However, the near-term bias is bearish as spot holds below the 20-day Exponential Moving Average (EMA) at 92.85 after failing to sustain recent highs near 95.12.
The Relative Strength Index (14) hovers just below the neutral 50 mark around 46.5, hinting that upside momentum has faded and keeping the risk skewed toward further corrective weakness while price remains capped by the EMA resistance.
On the topside, immediate resistance is defined by the 20-day EMA at 92.85, and a daily close above this barrier would be needed to ease downside pressure and reopen the path toward the 93.50–94.00 area. Until then, the absence of nearby identified support levels on the chart leaves USD/INR vulnerable to deeper pullbacks, with traders likely to watch prior reaction lows and round figures below 92.00 as the next potential demand zones if selling resumes.
(The technical analysis of this story was written with the help of an AI tool.)
Economic Indicator
Consumer Price Index (YoY)
Inflationary or deflationary tendencies are measured by periodically summing the prices of a basket of representative goods and services and presenting the data as The Consumer Price Index (CPI). CPI data is compiled on a monthly basis and released by the US Department of Labor Statistics. The YoY reading compares the prices of goods in the reference month to the same month a year earlier.The CPI is a key indicator to measure inflation and changes in purchasing trends. Generally speaking, a high reading is seen as bullish for the US Dollar (USD), while a low reading is seen as bearish.
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