USD/INR Rises as Indian Rupee Weakens on Stronger USD and Oil Prices

USD/INR Rises as Indian Rupee Weakens on Stronger USD and Oil Prices

June 3, 2025 – Forex Market Overview

The Indian Rupee (INR) weakened during early Tuesday trading in Europe, pushing USD/INR higher as global US Dollar (USD) demand resurged and crude oil prices surged. The pair is gaining ground ahead of key economic events, including US job data and India’s central bank decision later this week.

INR Under Pressure from Stronger USD and Oil Spike

The renewed demand for the US Dollar is weighing heavily on the INR, compounded by rising crude oil prices that increase India’s import bill. Barclays strategists noted that while the USD remains under global pressure, the INR is likely to underperform, adding that the Reserve Bank of India (RBI) may use this opportunity to rebuild FX reserves while adjusting its forward positions.

Mixed Domestic Outlook Could Offer Temporary Support

There are, however, offsetting factors that could provide modest support to the Rupee:

• Stronger-than-expected GDP growth figures from India
• Capital inflows tied to global equity index adjustments

Still, these may be overshadowed by broader macro pressures and central bank actions.

Key Events Ahead

• US JOLTs Job Openings (May) – due later today, may impact short-term USD strength
• RBI Policy Decision (Friday) – widely expected to announce a third consecutive 25 bps rate cut
• US Nonfarm Payrolls (Friday) – a major influence on USD trajectory

Related: How Oil Prices Impact the Indian Rupee

USD/INR Technical Levels

• Support: 82.85
• Resistance: 83.40
• Short-Term Trend: Bullish bias, with risks tied to RBI surprise or weaker USD

Related on Tredu.com:

• Understanding USD/INR Movements: What Traders Should Watch
• RBI Rate Policy: What’s Next for India’s Central Bank?
• The Role of Global Dollar Demand in Emerging Markets