The Indian Rupee extended losses against the US Dollar on Tuesday, with USD\/INR rising to near 93.50. Selling pressure followed the Reserve Bank of India withdrawing measures aimed at limiting one-way moves in the currency.<\/p>\n
The RBI removed curbs on state-run banks offering non-deliverable forwards (NDFs) to resident and non-resident users, and ended restrictions on rebooking foreign exchange derivative contracts. The changes were reported by Reuters.<\/p>\n
Talks between the US and Iran were reported as set to resume either Tuesday night or Wednesday morning. The Wall Street Journal said Iran told regional mediators it would send a team to Islamabad on Tuesday, but Tehran has not confirmed this.<\/p>\n
Washington confirmed Vice President JD Vance would travel to Islamabad to lead the US team. On Monday, Iran\u2019s foreign ministry spokesperson Esmail Baghaei said there was \u201cno plan for a second round of negotiations with the US for now.\u201d<\/p>\n
Foreign Institutional Investors sold Indian shares worth Rs. 1,059.53 crore on Monday. In the last three sessions of the previous week, FIIs bought Rs. 1,731.71 crore, averaging Rs. 577.24 crore.<\/p>\n
Markets are watching Kevin Warsh\u2019s confirmation hearing and US March Retail Sales at 12:30 GMT. Retail Sales are forecast to rise 1.4% month-on-month, after 0.6% in February.<\/p>\n
USD\/INR moved back above the 20-day EMA at 93.08, with RSI (14) in the 40.00\u201360.00 range. Levels noted were 94.00 on the upside and 92.46 on the downside.<\/p>\n
Looking back to the situation in April 2025, the Reserve Bank of India\u2019s decision to remove curbs on forex trading was a significant signal. We saw this as the central bank stepping back, willing to tolerate more currency weakness and allowing market forces to play a larger role. For us, this meant positioning for a weaker Rupee, as the primary supporter of the currency was becoming more hands-off.<\/p>\n
The uncertainty around the US-Iran talks at that time created significant volatility, which presented a clear opportunity in the options market. Given the binary nature of the outcome\u2014a deal causing risk-on sentiment or a collapse causing risk-off\u2014we should have considered buying volatility through straddles or strangles. This would have allowed us to profit from a large price swing in USD\/INR, regardless of the direction the talks went.<\/p>\n
We also noted the persistent selling by Foreign Institutional Investors, a trend that was well-established by early 2025. FIIs had pulled out over $3 billion from Indian equities in the first quarter of that year, and the selling in April confirmed this bearish sentiment. This capital outflow was a fundamental reason to maintain a long position on the US Dollar against the Rupee.<\/p>\n
The focus on strong upcoming US data, particularly the retail sales figures for March 2025, suggested a widening economic divergence. A strong US economy, which was later confirmed when the retail sales data came in at a robust 1.6%, supported the case for a stronger dollar. This reinforced the strategy of buying USD call options or selling INR futures, anticipating further dollar strength.<\/p>\n
From a technical standpoint, the key level for us was the 20-day EMA at 93.08. As the USD\/INR pair held above this mark, it provided a clear signal to initiate or add to long positions. We should have used this level to manage risk, placing stop-loss orders just below it while targeting the psychological level of 94.00.<\/p>\n","protected":false},"excerpt":{"rendered":"
USD\/INR neared 93.50 as RBI eased curbs, FIIs sold shares, and markets awaited US retail sales.<\/p>\n","protected":false},"author":38,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[46],"tags":[],"class_list":["post-45461","post","type-post","status-publish","format-standard","hentry","category-live-updates"],"acf":[],"aioseo_notices":[],"featured_image_src":null,"featured_image_src_square":null,"author_info":{"display_name":"josephine","author_link":"https:\/\/www.vtmarketsglobal.com\/en\/author\/josephine\/"},"_links":{"self":[{"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/posts\/45461","targetHints":{"allow":["GET","POST","PUT","PATCH","DELETE"]}}],"collection":[{"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/users\/38"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/comments?post=45461"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/posts\/45461\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/media?parent=45461"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/categories?post=45461"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/tags?post=45461"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}