USD/INR: Indian Rupee Gains Ground to 85.72 as the Dollar Rally Pauses

On January 07, 2025, the Indian rupee traded at 85.72 to the U.S. dollar, down nearly 0.02% against 85.83 at the previous close yesterday. The currency hit its all-time low of 85.84 yesterday.

Dollar Index Rally Pause

The dollar index slipped around 1% against major currencies after a news report indicated that Donald Trump’s advisors were contemplating imposing tariffs on all countries, focusing only on industries deemed vital to national or economic security.

However, Trump refuted the report, leading to a rebound in the dollar, which managed to recover much of its earlier decline.

The Asian currencies saw modest increases. Since Trump’s election in November, the dollar index has gained about 3%. The dollar index was last recorded at 108.2.

Key U.S. Economic Events Ahead

Investors are now focusing on the U.S. jobs report for December, scheduled for release next Friday, along with inflation data set for January 15.

Donald Trump is set to officially assume the U.S. presidency on January 20, with all eyes on his inaugural address and his approach to the nation’s and the world’s critical issues.

The U.S. Federal Open Market Committee (FOMC), responsible for monetary policy decisions, will announce its interest rate decision on January 29, 2025.

The combination of expectations for the Fed to keep interest rates elevated for a prolonged period and the potential policies under President-elect Trump have recently boosted the dollar and U.S. bond yields.

Oil Prices Extend Decline Amid Supply Expectations

Brent crude futures are 0.05% down, at $76.26 per barrel as of January 7, 2025. Oil prices continued their decline for the second consecutive session on Tuesday amid expectations of sufficient supply.

Meanwhile, investors are awaiting India’s first advance estimates for the current financial year’s GDP, which are expected later today. The government’s initial projection had forecast GDP growth between 6.5% and 7%.

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