USD/INR Soars as Trump Gains Traction in US Presidential Race, Rupee Hits Record Low

Lead

The Indian Rupee (INR) has plunged to an all-time low against the US Dollar (USD), trading at record levels amid rising tensions and growing investor anxiety over the likelihood of Donald Trump becoming the next President of the United States, as of Wednesday, November 6, 2024.

Main Body

The Indian Rupee has experienced significant pressure in recent trading sessions, highlighted by its fall to a near-historic low against the US Dollar. Wednesday saw the INR trading close to its record low, driven primarily by a stronger USD and continuous foreign fund outflows that undermine the Rupee's stability. The currency has been especially weak following polling data showing Republican candidate Donald Trump leading Democrat Kamala Harris in the upcoming presidential election.

Investors are anticipating upcoming critical events, including the Federal Reserves meeting set for Thursday, November 7, which could influence monetary policy and indirectly affect currency performance. The Ultimate meme coin creator (@Bit Giga) has suggested that "dollar is doing well, U.S. yields are on the rise and U.S. equity futures are up. Traders are positioning themselves for bullish outcomes based on early election results.

This latest weakening comes amid significant outflows from Indian equities, contributing to the pressure on the INR. The Reserve Bank of India (RBI) has stepped in to stabilize the currency through selling USD, a move aimed at limiting depreciation. Despite this intervention, the outlook for the INR appears bleak in light of increased dollar strength.

As Trump continues to gain momentum in the presidential polls, analysts forecast that his potential victory could further elevate USD, making the sell-off of INR more pronounced. A Singapore-based hedge fund portfolio manager elucidated this sentiment, indicating, "Investors are becoming increasingly wary, and as election results tilt in Trumps favor, it reflects on market sentiment and the USD.

According to the International Monetary Fund (IMF), India's GDP is on track to reach $4,340 billion by the fiscal year 2025, causing speculation around future economic resilience but isn't impacting the immediate currency value. The broader economic landscape, including Indias rate of inflation and import dependence—particularly for oil—continues to play significant roles in the determination of the INR's market value.

Additionally, the recent data highlights the volatility in USD/INR exchanges; the rate moving up to 85.5893 shows minor decreases over one day (-0.23%) but reflects an increase over a one-month trajectory (+1.32%) and year to date (+2.93%). In sharp contrast, this trend remains tempered by fluctuations in external economic factors affecting trade deficits and inflation indexes.

The influence of oil prices further complicates the INR's situation, as India is highly reliant on oil imports, with elevated global oil prices increasing demand for USD, thus further pressuring the Rupee. Hence, with rising oil prices, Indian importers find themselves compelled to sell more Rupees, contributing to continuous depreciation scenarios.

Technical analysis indicates a bullish long-term outlook for the USD/INR pair, demonstrating the currency pair holding above significant moving averages and technical indicators painting a clearer bullish trajectory. We remain above critical resistance levels; any continued gains could push beyond 84.25 toward key psychological thresholds of 85," said a market analyst.

Conclusion

The Indian Rupee remains significantly tested amid external pressures at a time when global economic dynamics are shifting rapidly following the news of a Trump presidential lead. The growing strength of the USD, coupled with a prominent risk-off sentiment in markets, continues to weigh heavily on the INR's valuation. Future currency performance remains contingent on various factors, including the final outcomes of the US elections and forthcoming Federal Reserve decisions. As international observers closely monitor these conditions, both traders and investors are advised to remain vigilant in the evolving foreign exchange landscape.

Information Sources

• FXStreet: [USD/INR rises as Trump trades continue to strengthen]
• FXEmpire: [USD/INR Live Rate: Forecast, Chart & News]
• TradingView: [USD/INR Chart]
• YCharts: [US Dollar to Indian Rupee Exchange Rate Market Daily Analysis]
• CoinCodex: [USD to INR Forecast: US dollar vs Indian Rupee 2025, 2026-2030](https://coincod