FX.co ★ Rupee Falls to 4-Week Low

The Indian rupee declined to approximately 90.4 against the US dollar, marking further losses for yet another session, reaching its lowest point in four weeks. This drop is attributed to reduced capital inflows and less dovish indications from Federal Reserve officials. Market participants have noted the strength of the US labor market and guidance from the Fed that any potential rate cuts would be contingent on steady progress towards the 2% inflation objective. This guidance has resulted in elevated Treasury yields and a strong dollar, thereby exerting downward pressure on the rupee. Additionally, recent economic data from India fell short of expectations; specifically, unemployment ticked up slightly to 4.8% in December 2025 from 4.7% in November, and the merchandise trade deficit expanded significantly to $25 billion from $20.6 billion the previous year. These developments have led investors to recalibrate their expectations in favor of further monetary policy easing by the Reserve Bank of India.