The uncertainty with respect to India-US trade deal and the geopolitical issues relating to Greenland have been weighing on the rupee
The rupee, which appeared to have steadied early this month, has been falling against the dollar in the recent sessions. By losing nearly 1 per cent over the last week, the local currency, now at 90.98, is close to the record low of 91.08, which it made in December.
The uncertainty with respect to India-US trade deal and the geopolitical issues relating to Greenland have been weighing on the rupee. That said, the biggest factor has been capital outflows. This is why the local currency has not been able to hold its ground even as the dollar stays weak.
According to NSDL (National Securities Depository Limited) data, the net FPI (Foreign Portfolio Investors) outflows over the past week have been at $1.6 billion, including equity and debt segments. So far in January, it stood at $2.8 billion.
On the technical front too, the rupee retains the bearish inclination as per the charts. Below is an analysis.
Chart
Last Friday, the rupee decisively breached the support at 90.30 and slipped. The price action shows a steady downtrend and so further decline cannot be rejected.
As a temporary relief, the fall in the dollar index can provide some support. The dollar index, after facing a resistance at 99.50, has seen a quick fall over the past two trading sessions. It is now trading at 98.70, a potential support.
So, the next movement in the rupee might depend on how the dollar index reacts to the support at 98.70. If this support is breached, it could extend the decline to 98. In this scenario, the rupee can gain some ground, potentially seeing an uptick to 90.30-90.50 region.
However, a gain beyond these levels might not happen unless there are any notable positive developments which can boost the risk-on sentiment in the market.
That said, if the dollar index bounces off the support at 98.70, it can rise back to at least retest the resistance at 99.50 if not surpass it. In which case, the rupee can hit fresh lows, possibly dropping to 91.50 and 91.75.
Outlook
Overall, due to the dollar weakness, the rupee might move up a little to 90.70 or 90.50. But then it is expected to eventually fall to 91.50 in the near-term.
Published on January 20, 2026
