Trading USD/INR

The USD/INR currency pair is a popular choice for day traders looking for a safe haven. The USD is the most traded currency on the international forex market. The INR is the 20th most traded currency worldwide. The INR is also somewhat protected from volatility by the buying and selling of USD/INR from the Reserve Bank of India (RBI). This page will break down the key insight needed to trade USD/INR, including the benefits of live trading the dollar against the rupee, economic factors to consider, how to measure exchange rate value, reading candlestick charts, and more.

USD/INR Trading Brokers

Forex.com are a leading forex broker. Offering the largest range of currency pairs (80+) and some of the tightest spreads in the industry.
NinjaTrader offer Traders Futures and Forex trading. Use Auto-trade algorithmic strategies and configure your own trading platform, and trade at the lowest costs.
eToro is a multi-asset platform which offers both investing in stocks and cryptoassets, as well as trading CFDs.
67% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.
Use digital options to take straightforward buy and sell positions on a range of currencies.
Trade with leverage on the FX market.
The leading US trading Exchange. Nadex offer genuine exchange trading to US clients on Binary Options. Fully regulated by the CFTC.
Zulutrade provide multiple automation and copy trading options across forex, indices, stocks, cryptocurrency and commodities markets
IB Boast a huge market share of global trading. With a minimum deposit of $10,000 however, they remain an option for larger traders only.
One of the largest discount brokers in the US, with a fixed trading commission and access to a large array of trading products and securities
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USD/INR Meaning

The USD/INR currency pair is the value of the US dollar against the Indian rupee. The forex pair tells the trader how many Indian rupees (the quote currency) are needed to purchase one U.S. dollar (the base currency).

Why Trade USD/INR?

The USD/INR is emerging as a popular option out of the exotic pairs group. As India’s economy and business climate continues to develop and grow, the currency’s outlook is improving. Trading the pair has become an attractive investment opportunity for forex traders.

  • Popularity – The USD is the most traded currency on the FX market. It accounts for approximately 88% of all foreign exchange transactions. The INR is the 20th most traded currency worldwide with approximately US$53 billion worth of INR traded daily.
  • Safety – The USD is considered to be the world’s most stable currency. The bulk of global foreign-exchange trading involves the USD.
  • Protected from volatility – When trading USD/INR, the Indian rupee trades on a ‘managed float’. This means the INR spot rate is market-determined, but somewhat protected from volatility by the buying and selling of USD/INR from the Reserve Bank of India (RBI).
  • Prevalence – The USD is one of the most popular reserve currencies. Its size leads to an abundance of historical exchange rate data on the pairing available for download from the likes of the NSE. This also makes it relatively straightforward to follow.

USD To INR History

Today, the Indian currency’s value is lower than USD, but this was not the case before. When India became independent in 1947 the situation was very much different. 1 INR used to be equal to 1 USD.

There are multiple arguments about how 1 USD/INR in 1947 held more value. But, it’s most commonly believed that there was no metric system. This meant all currencies held the same value.

Others believe that before 1947, India was a British ruled state, so the value of INR was higher because the value of GBP was higher. It is believed that 1 pound was equal to 13.37 rupees during 1947, and that’s why the value of USD should be INR 4.16 in 1947.

Since India’s independence in 1947, the value of INR against USD has consistently gone down. In the last ten years, the US federal fund rates have been largely flat at around 0.25%. This also plays a role in the current value of INR to USD.

From looking at a chart over time, you will see the changing value of 1 USD to INR. By analysing changes from 1947 to today, you’ll notice the exchange rate has almost continuously increased. This will give you an idea of the INR journey so far and where the US Dollar stands now.

Why USD Is Stronger Than INR

USD is stronger because it is kept by most global central banks in reserves. A large share of international transactions are also done with the dollar. The durability of the USD against INR also comes down to the strength of the US economy – people want to hold the US dollar because it is considered safe.

The Reserve Bank of India (RBI) also often buys US dollars from the market. This causes a rise in rupee liquidity. The increase in the supply of rupee without a corresponding demand then makes the rupee depreciate further against the dollar.

That said, there have been times when the strength of the USD/INR has switched. In the past, a record inflow of dollars through Foreign Portfolio Inflows (FPI) and other modes have increased the demand for the rupee. This has led to rupee rising against the US dollar.

USD/INR Forecast

When trading USD/INR it’s important to have a good idea of future trends and predictions for tomorrow. You can get this by looking at the latest news to see how the currency pair is performing today and against its history.

The USD has outperformed the emerging-market Indian rupee over the past few years. The stabilisation in the currency pairing has been partly down to intervention from the Reserve Bank of India (RBI).

The USD to INR reached its highest rate ever in February 2016, amounting to 68.80 INR.

The US Economy

The United States’ economy is the largest in the world. It’s important to understand the make-up of the US economy, and what influences the USD, to implement an effective strategy when trading the FX pair.

  • Like any other fiat currency, the value of the USD depends on the economic activity and outlook of the United States.
  • The largest contributor to the US economy is its service sector. This includes finance, real estate, insurance, professional and business services, plus healthcare.
  • The US has a relatively open economy. This means it can facilitate flexible business investment and direct foreign investment in the country.
  • The USD can be influenced by labour market data. This includes non-farm payroll (NFP) results, unemployment levels, GDP and inflation data, as well as interest rates set by the Fed.
  • The value of the USD on the world market can also be influenced by market psychology and geopolitical risk that varies at different times.

Investing in the USDINR

The Indian Economy

India’s economy has experienced rapid growth thanks to its farming and services industries. Understanding its drivers will help you make informed decisions when investing in the USD/INR.

  • India is the fourth-largest global economy. It also has one of the largest populations among nations, with more than 1 billion inhabitants.
  • India has a diversified economy largely based on industry and farming. Half of India’s workers rely on agriculture. Farming alone has posted growth rates in the last decade of more than 5% annually.
  • Services, such as IT, business outsourcing and software, account for about 60% of India’s economic growth.
  • India’s economy has been fairly liberal since the 1990s. This has helped to boost economic growth over the last two decades.
  • However, inflexible business regulation, widespread corruption, and ongoing poverty often prevent the Indian economy from expanding further.

Note, high US Fed interest rates tend to attract investment away from emerging market countries like India. This is because investors seek rising returns in the US.

Trading the USDINR forex pair

Measuring USD/INR Value

The value of the USD/INR can be measured by the U.S. Dollar Index (USDX). This is made up of a range of currencies affiliated with the major trading partners of the United States. These include the Euro (57.6% of the Index), the Japanese Yen (13.6%), the British Pound (11.9%), the Canadian Dollar (9.1%), the Swedish Krona (4.2%), and the Swiss Franc (3.6%). The index goes up when the USD gains strength against these currencies and falls when it weakens.

Yearly averages and charts vary, but following the USDX is a great way to stay on top of market sentiment.

Reading A USD INR Candlestick Chart

There are many different types of live forex charts available on trading platforms. However, a daily or weekly candlestick chart is often what traders find most useful when trading USD/INR. Price history charts are available at many top brokers, such as Oanda, and can give a view of yesterday’s price as well as future exchange rate forecasts.

A candlestick chart is a graph used to analyse the spot rate movements of currencies, such as USD/INR futures, securities, or derivatives. The technical chart represents four key pieces of information for a certain time frame – the open and the close, as well as the high and the low.

Here are five key facts that will help you to read a live USD IND candlestick chart:

  1. The ‘what’ (meaning USD/INR price action) is more significant than the ‘why’ (i.e earnings, news, etc)
  2. All the present and available information is reflected within the price
  3. Sellers and buyers can move markets based on anticipations and emotions, such as fear and greed
  4. Forex markets tend to fluctuate
  5. The real price might not reflect the underlying value
Trading USDINR using candlestick charts
USD/INR forex investing

If you set a USD/INR candlestick chart to a 30 minute time period, each candle will form over 30 minutes. If the candlestick chart is set to a 15 minute time period, then every candle will form over 15 minutes.

USD to INR charts can span 10 years or 20 years or you can get graphs for 5 years. They can show the day’s highs and lows, USD versus INR trends and forecasts for tomorrow and provide direct quotes via the trading platform. Support and resistance levels can also be plotted.

Leading brokers also convert research reports into user-friendly trading materials and provide recommendations as to what today’s USD to INR trend may be. Live, daily and weekly forecasts are also commonplace with quarterly and monthly averages, market watch lists and user-friendly pip calculators. For money control, volatility indexes and forward premiums, you may need to consult the broker’s support team.

Find out more about forex trading technical analysis and strategies.

Final Word On Trading USD/INR

The USD/INR forex pair offers a good opportunity for traders looking to get involved with exotic pairs. The INR is somewhat protected from volatility and the USD is considered to be the most stable currency on the market. The growth of the Indian economy in recent years has also helped to make the FX pair an attractive investment today. Before you start margin trading, it’s important to understand what influences the USD/INR exchange rate and the strength of each economy.

FAQ

How do I trade USD in INR options?

If you are expecting the USD to INR live pair to move up (the dollar to appreciate) then you can buy a call option on the USD v INR pair. If you are expecting the USD to INR conversion to move down (the INR to appreciate) then you can buy a put option on the USD/INR pair.

Is IND/USD a restricted currency?

The IND is often considered to be a restricted currency. Fund transfers in this currency are typically not allowed outside of India, though online trading offshore is still possible.

What is the highest ever USD to INR?

The USD INR all-time high was reached in 2016, at 68.80 INR to USD. See the latest price chart for the exchange rate today.

How is the volatility of USD/INR calculated?

The historical volatility of USD/INR is calculated by looking at the change in value over time. The basic period for a prediction is often a one-day change, though you can use a 1-week or 1-month change. You can use a USD/INR graph to map this out. You will also need to determine how many periods you plan on investing in the forex pair when making the calculation.

What happens if 1 USD = INR?

If 1 USD = INR then India, in the short-term at least, would likely feel wealthy. Many forex traders that caught the trend would probably make large profits. However, in the longer-term, the economy may suffer as foreigners wouldn’t be able to afford to invest or travel to India. Imports would rise and so too would unemployment.