Rupee hits 90-mark against US dollar: Why, outlook and market strategy here

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Rupee has been on a downward spiral against the US dollar off late, with the Indian unit hitting the 90-mark against the greenback on Wednesday.  Lack of clarity on the trade deal with the US and the Reserve Bank of India (RBI) remaining on the sidelines, according to analysts, are some of the reasons why the rupee has been on a slippery slope in the last few days.

 

Stock markets, too, have taken note of the recent developments with the Sensex slipping nearly 1 per cent in the last one week. The index hit a low of 84,763.64 levels on Wednesday, down around 0.4 per cent. 

 

Here's how leading analysts and brokerages have interpreted the developments. 

 

Madan Sabnavis, chief economist, Bank of Baroda

 

Dollar outflows from FPIs, trade deficit probably widening with export growth slowing down, and the trade deal with US is still not on the table are the three main reasons why the rupee is falling. The dollar index is less than 100 and hence the rupee should be firm. 

 

The Reserve Bank of India (RBI) appears to be apparently silent on intervention. All this is adding to the sentiment, which is driving the rupee down. This will help exporters at the margin, but is not good for importers or inflation. Any sale of dollars will also mean pressure on liquidity. 

 

We believe that any mark breached by the rupee which prevails for 2-3 days, becomes the new benchmark. The market is talking of 91, though we think post policy there should be correction back to 88-89 levels. 

 

Jateen Trivedi, VP Research Analyst - Commodity and Currency, LKP Securities

 

Rupee slipped below the 90-mark, pressured by the absence of a confirmed India–US trade deal and repeated delays in timelines. Markets now want concrete numbers rather than broad assurances, leading to accelerated selling in the rupee over the past few weeks.

 

Record-high metal and bullion prices have further worsened India’s import bill, while steep US tariffs continue to strain export competitiveness. This has kept weakened sentiment across equities compared to global markets and import-heavy sectors such as mineral fuels, machinery, electrical equipment, and gemstones.

 

Muted RBI intervention has also contributed to the swift depreciation. With the RBI policy announcement on Friday, markets expect clarity on whether the central bank will step in to stabilize the currency. Technically, the rupee is deeply oversold, and a move back above 89.80 is essential for any meaningful recovery. 

 

VK Vijayakumar, Chief Investment Strategist, Geojit Investments

 

The real concern now, which has contributed to the slow drifting down of the market, is the continued depreciation in the rupee and fears of further depreciation since the RBI is not intervening to support the rupee. This concern is forcing the FIIs to sell despite the improving fundamentals of rising corporate earnings and strong rebound in gross domestic product (GDP) growth. 

 

The rupee depreciation will halt and even reverse when the India-US trade deal materialises. A lot, however, will depend on the details of the tariffs to be imposed on India as part of the deal. 

 

The ideal strategy for investors in this period of uncertainty is to remain invested in high quality growth stocks in the large and midcap segments. Small-caps, as a segment, continues to be overvalued and are, therefore, best avoided.

 

Equinomics Research

 

Weak exports due to US tariffs is partly causing the rupee to weaken. We still believe that India would ultimately sign an amicable trade deal with the US. Oil imports from Russia reportedly going down while the same from the US is rising.  S&P Global also anticipates a potential trade agreement with the US, which could boost labour-intensive sectors and strengthen the rupee. 

 

The small-and midcap (SMC) segment is likely to remain weak in the short term, till December end or even March 2026 end. Hence, we suggest a tilt (of around 50 per cent of equity corpus) towards Sensex / NIFTY stocks in the short-term. 

 

That said, we reiterate that the outlook for SMC beyond 6 to 12 months looks robust as we anticipate a burst in valuation bubbles in the recently listed IPOs, which, in turn, could bring back focus to quality SMC stocks in the listed space. 

 

Ponmudi R, CEO, Enrich Money

 

On the intraday chart, Nifty is currently oscillating between the 25,900–26,000 immediate support zone, while the deeper support placed near 25,850 levels. A decisive break below this could extend the weakness toward 25,700. On the upside, supply remains firm in the 26,100–26,200 resistance band. 

 

Dips toward the lower end are attracting selective buying in defensives and quality large-caps, while every bounce is being met with short-term profit-booking. Overall, the post-opening setup points to a range-bound session with a mild negative bias, where level-based trading and quick profit-booking are likely to work better than directional bets.