• USD/INR edges higher despite equity inflows into Indian markets.
• Foreign investors bought ₹694.5 million ($7.67 million) in Indian equities on Tuesday, extending inflows to a third straight session.
• Markets expect Nonfarm Payrolls to show 70,000 jobs added, with Unemployment Rate steady at 4.4% in January.

USD/INR appreciates on Wednesday after registering modest losses in the previous session. However, the upside of the pair could be restrained as the Indian Rupee (INR) is supported by equity inflows. INR gains may be limited as persistent Greenback demand from local corporates caps the upside.

Reuters cited provisional data suggesting foreign investors purchased Indian equities worth 694.5 million rupees ($7.67 million) on Tuesday, marking a third straight session of inflows. Market participants are also monitoring corporate earnings, with the December-quarter reporting season drawing to a close.

The INR found support around the 90.70–90.80 zone on Tuesday, a key level seen as critical to sustaining momentum following the US–India trade deal. Meanwhile, traders highlighted continued dollar demand from importers hedging liabilities, with buying interest increasing whenever the Rupee strengthens.

Investor sentiment strengthened further due to robust domestic liquidity conditions. Substantial liquidity injections by the Reserve Bank of India pushed the overnight borrowing rate nearly 100 basis points below the policy benchmark, generating the largest liquidity surplus in six months. The RBI chose not to conduct short-term liquidity tightening operations, keeping overnight rates low and sustaining the surplus at around INR 3 trillion, supported by government expenditure and ongoing fund infusions.

The US Dollar Index (DXY), which measures the value of the US Dollar (USD) against six major currencies, extends its losses for the fourth successive session and is trading near 96.60 at the time of writing. Traders await the delayed US employment report scheduled to be released on Wednesday for more hints about the US interest rate outlook. Markets expect the Nonfarm Payrolls (NFP) to show 70,000 jobs added in the US economy in January, while the Unemployment Rate is projected to remain steady at 4.4% during the same period.

The US Census Bureau reported Tuesday that US Retail Sales were flat at $735 billion in December, following a 0.6% rise in November and missing expectations for a 0.4% increase. On a YoY basis, Retail Sales rose 2.4%, while total sales for October–December 2025 increased 3.0% (±0.4%) compared with the same period a year earlier.

USD/INR falls to near 90.50 after pulling back from nine-day EMA

USD/INR is trading around 90.70 at the time of writing. Daily chart analysis suggests a prevailing bearish bias, with the pair moving within a descending channel. The 14-day Relative Strength Index (RSI) at 47 indicates neutral-to-bearish momentum, easing after recent overbought conditions.

Initial support is located at the 50-day Exponential Moving Average (EMA) near 90.50. A decisive break below this level could weaken medium-term momentum and open the door toward the channel’s lower boundary around 89.30. On the upside, immediate resistance stands at the nine-day EMA near 90.83. A sustained move higher may target the upper boundary of the channel around 91.60, followed by the record high of 92.51 reached on January 28.