Currency Trends: The sudden unwinding of risk trades is weighing on emerging-market currencies, including the Indian Rupee
FinTech BizNews Service
Mumbai, November 22, 2025: Global risk-off sentiment has spilled into currency markets after a sharp overnight sell-off in cryptocurrencies and AI-linked technology stocks. "The sudden unwinding of risk trades is weighing on emerging-market currencies, including the Indian Rupee. Adding to the pressure is the lingering uncertainty around the proposed India–US trade deal, which markets had hoped would offer clarity on the bilateral economic outlook. With no firm timelines emerging, sentiment remains fragile, according to Anindya Banerjee, Head of Research – Currency, Commodity and Interest Rate Derivatives, Kotak Securities.
USD/INR broke decisively above 89.00, a level many importers and dealers believed the RBI would defend. Once this perception failed, aggressive short-covering kicked in across onshore and offshore markets, triggering stops and amplifying the upside move.
In the near term, a combination of risk-off flows, a firmer US Dollar Index, and trade-deal uncertainty keeps the bias upward, with the pair potentially testing the 90.00 mark. For now, traders are watching a broad spot range of 88.70–90.30.
On fundamentals, the Rupee remains undervalued relative to its peers on a REER basis, but a positive catalyst is needed to close that gap. A successful conclusion of the India–US trade agreement could be that trigger.”
