Indian Rupee Surges as Dollar Weakens Ahead of Key US Labor Report
The Indian Rupee (INR) appreciated significantly against the US Dollar (USD) during Thursday’s European session, with the USD/INR pair touching a new monthly low near 85.40. This move came as the US Dollar weakened in anticipation of the upcoming US Nonfarm Payrolls (NFP) data for June, set to be released at 12:30 GMT.
Markets expect the US economy to have added just 110,000 jobs in June, a slowdown from May’s 139,000. The Unemployment Rate is also forecast to edge up to 4.3% from 4.2%.
Wage growth data will also be in focus. Average Hourly Earnings are expected to grow 3.9% year-over-year, while monthly wage growth is anticipated to ease to 0.3% from 0.4%.
These indicators are being closely watched as several US Federal Reserve officials, including Governor Christopher Waller, have recently supported rate cuts, citing potential labor market weakness. “The Fed should not wait for the job market to crash in order to cut rates,” Waller noted in late June.
Further signs of labor market softness appeared in Wednesday’s ADP report, which revealed private-sector job losses of 33,000 in June—well below expectations for a 95,000 gain and marking the first decline since the pandemic. May’s figures were also revised downward.
INR Outperforms Peers on Trade Deal Hopes
The Indian Rupee also gained broader strength across currencies amid speculation that India and the US may finalize a trade agreement within 48 hours, according to a report from NDTV. Both nations are reportedly working to reduce tariff barriers, potentially increasing competitiveness for US firms in the Indian market.
US President Donald Trump hinted at progress, stating: “I think we are going to have a deal with India… It is going to be a deal where we are able to go in and compete.”
However, Foreign Institutional Investors (FIIs) have adopted a cautious stance, selling Indian equities worth ₹3,531.76 crores in just the first two trading sessions of July due to uncertainties surrounding the upcoming US tariff policy deadline on July 9.
Meanwhile, Trump’s controversial “Big Beautiful Bill” has cleared the US Senate and now awaits House approval. Critics argue the bill’s tax cuts and spending provisions could raise national debt to $40 trillion over the next decade, potentially leading to further sovereign credit downgrades.
INR Among Top Gainers
The INR posted strong gains across major global currencies on the day:
| Currency | Change vs. INR |
|---|---|
| USD | -0.26% |
| EUR | -0.38% |
| GBP | -0.06% |
| JPY | -0.54% |
| CAD | -0.31% |
| AUD | -0.42% |
| CHF | -0.50% |
The Rupee was strongest against the Japanese Yen and Swiss Franc.
Technical Outlook: USD/INR at Monthly Low
The USD/INR pair broke its recent range between 85.56 and 86.00 and slipped to a low of 85.40, reinforcing a bearish trend. The pair is trading below the 20-day EMA (currently near 85.90), with the 14-day Relative Strength Index (RSI) also below 50.00—confirming downward momentum.
Key support lies at the 200-day EMA around 85.35, while immediate resistance is seen at 86.13, the high from Wednesday’s session.
