Weekly Indian Rupee (INR) Currency Analysis: February 1 - February 8, 2026

1. Executive Summary

The Indian Rupee (INR) exhibited an exceptionally strong performance during the first week of February 2026, ending the period with gains against all 22 major global currencies tracked in our basket. The week was characterized by a consistent appreciation of the Rupee, driven by a combination of favorable domestic economic indicators and a cooling of the US Dollar's recent rally. The most notable performance was the Rupee's surge against the Japanese Yen and the Swedish Krona, while even the heavyweights like the British Pound and US Dollar yielded significant ground to the Indian currency. This broad-based strength suggests a positive shift in market sentiment toward emerging market assets, with India leading the charge.

2. Complete Rate Table

3. Major Pairs Analysis

USD/INR

The benchmark USD/INR pair saw a sharp correction this week, dropping from an opening of ₹92.20 to a close of ₹91.05. This 1.25% appreciation for the Rupee signifies a major psychological break below the 92.00 level. Traders cited aggressive FII inflows into the Indian equity markets and a softening in the US Treasury yields as the primary catalysts for this move.

EUR/INR

The Euro faced significant pressure, falling 1.49% against the Rupee. Closing at ₹108.49 compared to its weekly high of ₹110.13, the EUR/INR pair was influenced by cooling inflation data from the Eurozone, which led markets to anticipate a more dovish stance from the ECB, thereby weakening the Euro against the surging Rupee.

GBP/INR

The British Pound was one of the week's biggest losers among major currencies, sliding 1.80% to finish at ₹124.78. Despite a relatively stable UK economy, the Rupee's domestic momentum far outpaced the Sterling, marking a favorable week for Indian students and travelers heading to the United Kingdom.

4. Regional Currency Review

Gulf Currencies

Currencies from the Middle East, including the UAE Dirham (-1.21%), Saudi Riyal (-1.23%), and Qatari Riyal (-1.24%), moved in close correlation with the USD. The Kuwaiti Dinar saw a notable drop of 1.34%, falling from ₹307.03 to ₹302.92. This collective decline in Gulf currency values against the Rupee has temporary implications for NRI remittances, providing a slightly less favorable conversion rate than the previous week.

Asian Currencies

The Japanese Yen (JPY) was the most volatile and the weakest performer against the Rupee, crashing 2.80% to close at ₹58.29. This continues the trend of Yen weakness amidst the Bank of Japan's cautious policy path. The Singapore Dollar also fell by 1.48%, while the Thai Baht saw a moderate decline of 1.01%.

European & Pacific Currencies

In Europe, the Swedish Krona (SEK) plunged 2.32%, making it the second weakest currency after the Yen. The Swiss Franc (CHF) and Norwegian Krone (NOK) both retreated by 1.67%. In the Pacific region, the Australian Dollar (AUD) showed more resilience, declining only 0.49%, suggesting that commodity-linked currencies are finding some support even as the Rupee gains.

5. Key Drivers This Week

• RBI Intervention & Stability: The Reserve Bank of India (RBI) appears comfortable allowing the Rupee to appreciate within a controlled band, likely to help offset the cost of imported inflation.
• FII/DII Flows: Strong Foreign Institutional Investor (FII) interest in Indian debt and equity was a major contributor to the Rupee's liquidity and strength.
• Oil Prices: A stabilization in global crude oil prices around lower ranges has reduced the import bill pressure, providing a fundamental cushion for the INR.
• Global Macro Shifts: Expectations that the US Federal Reserve may pause or pivot its interest rate cycle have dampened the USD's appeal, allowing the INR to regain territory.

6. Impact Analysis

For Importers

This is a highly favorable week for importers, particularly those dealing in electronics (sourced from Japan/Singapore) and luxury goods (Europe). The 2.80% drop in JPY and 1.49% drop in EUR significantly lower the landing cost of goods.

For Exporters

Indian exporters may face margin compression as their foreign currency earnings now convert into fewer Rupees. Those exporting to the UK and Japan are particularly impacted given the 1.80% and 2.80% appreciation respectively.

For Students and Travelers

Students in the UK and Europe should find this an opportune time to remit tuition fees. With the Pound at ₹124.78 (down from ₹127.07), the savings on large transfers are substantial. Travelers to Japan will find their Rupee purchasing power significantly enhanced.

7. Technical Outlook

For the coming week, the USD/INR pair has a strong support zone at 90.80. If this level is breached, we could see a further slide toward 90.50. On the upside, 91.50 now acts as a stiff resistance level. Most technical indicators (RSI and MACD) suggest that the Rupee is in an overbought territory in the short term, hinting at a potential minor consolidation or slight pullback.

8. Forward Guidance

Market participants should keep a close watch on upcoming CPI data and the RBI's next policy statement. While the current trend is bullish for the Rupee, global geopolitical developments could introduce volatility. We expect the Rupee to maintain its strength in the 90.80 - 91.80 range against the USD for the next several trading sessions.

9. Practical Recommendations

• Currency Conversion: This is an excellent time to convert INR into JPY, SEK, and GBP for future needs.
• Hedging: Importers should consider hedging their upcoming liabilities while the Rupee is at these relatively strong levels. Exporters may want to wait for a temporary bounce back in the USD before locking in long-term contracts.
• Watchlist: Keep a close eye on the JPY/INR pair; further weakness in the Yen could provide even better entry points for technology-related imports.