USD/INR climbs amid risk-off mood, Trump tariff worries

• The Indian Rupee loses traction during Monday’s early European session. 
• The stronger USD, foreign outflows and the concerns about the Indian economic slowdown weigh on the INR. 
• The Fed rate decision will take center stage on Friday. 

The Indian Rupee (INR) edges lower on Monday after posting its biggest weekly gain in nearly 17 months in the previous session. The weakening in the US Dollar (USD) after US President Donald Trump refrained from immediately imposing tariffs on key trading partners supporting the local currency. Furthermore, the Reserve Bank of India’s (RBI) intervention in the foreign exchange market and lower crude oil prices could help limit the INR’s losses. 

Nonetheless, the renewed Greenback demand from importers, Foreign Portfolio Investors (FPIs) outflows from the Indian stock market and concerns about an economic slowdown in India could exert some selling pressure on the INR. All eyes will be on the US Federal Reserve (Fed) interest rate decision on Wednesday, with no change in rate expected. Traders will take a cue from the Press Conference about the US interest rate outlook this year.