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  • USD/INR weighs down by broad USD weakness, anticipated year-end strength of the Indian Rupee (INR).
  • Sparse trading conditions, wait for second-tier US data and RBI’s another open market operation (OMO) in a short time add to the reasons.

USD/INR slips to 71.32 during the pre-European session on Monday. The pair portrays the broad US Dollar (USD) weakness and market’s profit-booking ahead of the Reserve Bank of India’s (RBI) scheduled open market operations.

The RBI is up for the second OMO in a week’s time. The Economic Times mentions that the RBI will carry out simultaneous purchase and sale of government securities through special open market operations (OMOs) for Rs 10,000 crore each on December 30 following a review of liquidity situation.

Talks of the year-end fundraising activity in India as well as expectations from the UK-based Centre for Economics and Business Research (CEBR) that India will overtake Germany as the world’s fourth-largest economy in 2026 and Japan to be the third-largest in 2034, also helped INR.

Markets have also considered the cautious optimism surrounding the US-China trade and the US-Middle tension to sell the greenback.

In doing so, the risk tone has been sluggish with the US 10-year treasury yields liquidating early-day gains to 1.875%.

Looking forward, the US Chicago Purchasing Managers’ Index and the Dallas Fed Manufacturing Business Index can offer intermediate moves ahead of the year-end dull trading session.

Technical Analysis

While a sustained break of 71.60 is needed to aim for 72.00, 100-day Simple Moving Average (SMA) near 71.30 acts as immediate support for the pair.