USD/INR declines on RBI's intervention, US data awaited

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The Indian Rupee (INR) gains sharply against the US Dollar (USD) on Wednesday, with the USD/INR pair slumping almost 0.5% to near 89.80.

The Indian Rupee rises sharply against the US Dollar, pushing USD/INR lower to near 89.80.
The RBI's intervention has supported the Indian Rupee to regain ground
Investors await a slew of US economic data due in the North American session.

The Indian Rupee (INR) gains sharply against the US Dollar (USD) on Wednesday, with the USD/INR pair slumping almost 0.5% to near 89.80. The Indian currency has strengthened as the Reserve Bank of India (RBI) has intervened to counter one-way excessive moves in favor of USD/INR, according to Reuters.

This is the RBI's first intervention of 2026. In December 2025, the RBI intervened multiple times after USD/INR hit an all-time high of 91.55.

However, the pair is expected to remain under pressure as renewed trade frictions between the United States (US) and India, and the consistent Foreign Institutional Investors (FIIs) selling in the Indian equity market, will likely keep the Indian Rupee on the backfoot.

Earlier this week, US President Donald Trump threatened to increase tariffs on India for not supporting on Russia oil issue, which is directly linked to the purchase of oil by New Delhi from Moscow.

New Delhi is already charged with 50% tariffs on its exports to Washington, which includes a 25% punitive duty for buying Russian oil, which is one of the highest among all trading partners of the US.

Though the impact of trade tensions between the US and India is merely 0.3%-0.5% on India’s Gross Domestic Product (GDP), according to a report from Times of India (ToI), the influence is more sentimental, which is clear from the consistent outflow of foreign funds from the Indian stock market.

In 2025, FIIs offloaded their stake worth Rs. 3,06,418.88 crore in the Indian equity market after remaining net sellers in eight out of 12 months. So far in January, overseas investors have sold shares worth Rs. 3,122.68 crore; however, the pace of selling appears to have slowed in the last two trading days. FIIs have cumulatively sold shares worth Rs. 143.88 crore on Monday and Tuesday.

The table below shows the percentage change of Indian Rupee (INR) against listed major currencies today. Indian Rupee was the strongest against the Canadian Dollar.

	USD	EUR	GBP	JPY	CAD	AUD	INR	CHF
USD		-0.03%	0.00%	-0.11%	0.02%	-0.01%	-0.30%	-0.02%
EUR	0.03%		0.04%	-0.09%	0.04%	0.02%	-0.28%	0.00%
GBP	-0.01%	-0.04%		-0.11%	0.00%	-0.01%	-0.32%	-0.03%
JPY	0.11%	0.09%	0.11%		0.12%	0.10%	-0.19%	0.09%
CAD	-0.02%	-0.04%	-0.01%	-0.12%		-0.02%	-0.33%	-0.03%
AUD	0.00%	-0.02%	0.01%	-0.10%	0.02%		-0.30%	-0.01%
INR	0.30%	0.28%	0.32%	0.19%	0.33%	0.30%		0.30%
CHF	0.02%	-0.01%	0.03%	-0.09%	0.03%	0.01%	-0.30%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Indian Rupee from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent INR (base)/USD (quote).

Daily digest market movers: The major highlight ahead is US NFP data for December

The USD/INR pair is expected to trade cautiously during the day ahead of the release of key US economic data in the North American session. As of writing, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, trades subduedly near 98.50.
In North American trading hours, investors will focus on the ADP Employment Change and the ISM Services PMI data for December, and the JOLTS Job Openings data for November.
The ADP is expected to report that the private sector added 47K fresh workers after firing 32K in November. The ISM Services PMI is estimated to come in at 52.3, lower than the prior reading of 52.6, which suggests that the service activity continues to expand but at a moderate pace. And, the JOLTS Job Openings data will likely show that employers posted fresh 7.64 million, almost similar to October’s reading.
Investors will pay close attention to private payrolls and job postings data to get cues on the current state of labor demand in the US. The employment-linked data will significantly influence market expectations for the Federal Reserve’s (Fed) monetary policy outlook, given that officials delivered three interest rate cuts in 2025, mainly due to a weakening job market.
On Tuesday, Richmond Fed Bank President Thomas Barkin again highlighted employment risks, stating that "no one wants the labor market to deteriorate much further". Barkin also signaled that policymakers will perform a delicate balancing act in upcoming meetings as inflation is still above the 2% target.
The major highlight of the week will be the US Nonfarm Payrolls (NFP) data for December, which will be released on Friday.

Technical Analysis: USD/INR struggles to hold 90.00

USD/INR tests regions below the psychological level of 90.00 at the open on Wednesday. The outlook of the price has become uncertain as it struggles to hold the 20-day Exponential Moving Average (EMA), which trades around 90.22.

The 14-day Relative Strength Index (RSI) slips to 49.28 after unwinding overbought conditions, placing momentum at the neutral line and tilting pressure modestly to the downside.

With momentum fading, upside attempts would need an RSI recovery above 50 to reassert buying interest and open a retest of 91.3115. If RSI extends lower toward the mid-40s, sellers could press the pullback and keep the cross range-bound until momentum stabilizes.

(The technical analysis of this story was written with the help of an AI tool.)

(This story was updated on January 7 at 10:23 GMT to reflect a last-minute consensus change in the ADP Employment Change for December to 47K.)

Employment FAQs

How do employment levels affect currencies?

Labor market conditions are a key element to assess the health of an economy and thus a key driver for currency valuation. High employment, or low unemployment, has positive implications for consumer spending and thus economic growth, boosting the value of the local currency. Moreover, a very tight labor market – a situation in which there is a shortage of workers to fill open positions – can also have implications on inflation levels and thus monetary policy as low labor supply and high demand leads to higher wages.

Why is wage growth important?

The pace at which salaries are growing in an economy is key for policymakers. High wage growth means that households have more money to spend, usually leading to price increases in consumer goods. In contrast to more volatile sources of inflation such as energy prices, wage growth is seen as a key component of underlying and persisting inflation as salary increases are unlikely to be undone. Central banks around the world pay close attention to wage growth data when deciding on monetary policy.

How much do central banks care about employment?

The weight that each central bank assigns to labor market conditions depends on its objectives. Some central banks explicitly have mandates related to the labor market beyond controlling inflation levels. The US Federal Reserve (Fed), for example, has the dual mandate of promoting maximum employment and stable prices. Meanwhile, the European Central Bank’s (ECB) sole mandate is to keep inflation under control. Still, and despite whatever mandates they have, labor market conditions are an important factor for policymakers given its significance as a gauge of the health of the economy and their direct relationship to inflation.

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