USD/INR: Rupee Poised for Weekly Losses? Key Market Movers to Watch Next Week

The Indian Rupee is expected to register weekly losses, driven by Trump tariff concerns. However, as of 3:15 PM on February 7, 2025, the rupee gained some respite, with the USD/INR pair trading at 87.378, down 0.24% against its previous close. The pair has been on a rising trajectory throughout the week but managed to snap a 4-session gaining streak today.

Tariff Threats Keep Asian Currencies Under Pressure

The potential imposition of tariffs, particularly by President Donald Trump, is continuing to affect investor sentiment, diminishing risk appetite in the market. Bank of Canada Governor Tiff Macklem highlighted the growing uncertainty caused by US policy shifts, noting that Trump’s tariff threats were already taking a toll on businesses and households.

On Monday, Trump agreed to temporarily pause a 25% tariff on nearly all imports from Canada and Mexico, which could have otherwise triggered severe economic consequences, including recession and rising prices.

FIIs Turn Net Sellers

On February 6, Foreign Institutional Investors (FIIs) turned net sellers of Indian equities, disposing of equities worth ₹3,550 crore, while Domestic Institutional Investors (DIIs) maintained their buying momentum, net purchasing ₹2,721 crore.

This shift occurred after FIIs had been net buyers for the first time in 23 consecutive sessions of net selling. Year-to-date, FIIs have net sold ₹96,993 crore, whereas DIIs have net bought ₹93,408 crore worth of shares.

Key Events for Next Week February 10-14, 2025

1. Federal Reserve Chairman Jerome Powell’s Testimony

• Date: February 11, 2025.
• Event: Powell will testify before the Senate Banking Committee, marking his first appearance before lawmakers since July.

2. PM Modi’s Meeting with President Trump

• Date: February 11, 2025.
• Event: As per news reports, PM Modi is invited to meet with US President Trump. Discussions may include trade tariffs, especially on India’s high tariffs on US products.

3. India – Inflation Data Releases 

• Date: February 12, 2025.
• Event: India to release January CPI and Industrial production data.

4. India – Trade Balance

• Date: February 14, 2025.
• Event: India to release January Trade Balance data.

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