A break below 88.85 will increase the danger of the rupee declining towards 89.40-89.50 in the short term
The Indian rupee has declined sharply in the past week. After trading stable between 87.60 and 88 for more than a week, the domestic currency was beaten down again over the last one week.
The rupee fell to a low of 88.80 on Monday before recovering slightly and has closed at 88.65 on Tuesday. The currency is down about 0.44 per cent in the last one week.
Strong dollar
The US dollar index (100.10) has been moving up very well. The trigger for the rise in the dollar index came from the outcome of the US Federal Reserve meeting on October 29.
The Fed cut the interest rates by 25-basis points (bps) to 3.75-4 per cent in line with market expectation.
However, the central bank had indicated that another 25-bps rate cut in its next meeting in December might be doubtful. This has aided the dollar index to gain strength since then
Dollar outlook
The outlook is bullish. The dollar index has risen well above a key resistance level of 99.80. It has room on the upside to test 101-101.20 in a week or two. That in turn can continue to keep the rupee under pressure.
Rupee outlook
A crucial support is in the 88.80-88.85 region. A break below 88.85 will increase the danger of the rupee declining towards 89.40-89.50 in the short term.
Supports are at 88.20 and 88. A strong rise above 88 is needed for the rupee to rise back towards 87.60 and 87.40. But that looks less likely since the dollar index is looking strong.
However, if the central bank intervenes to avoid a fall below 88.85, then a range of 88.00-88.85 is a possibility for some time.
Published on November 4, 2025
