A combination of factors has led to the Indian Rupee hitting a 4-month high versus the US Dollar. The Rupee’s strength comes despite robust inflows into India and the central bank’s desire to purchase dollars to buoy the countries dollar reserve. The upward movement in the Rupee comes despite a rebound in the dollar versus other currencies and an increase in US interest rates, which are the driving factor behind the interest rates differential. The technicals point to a stronger Rupee, which broke out versus the US dollar, but now the USD/INR appears to be oversold.