Can the divergence between DXY and USD/INR pave the way for rupee’s return to 86.50?

USD/INR diverges from the U.S. Dollar Index as the rupee weakens to ₹88.45 despite DXY easing. RBI unwinding, FII outflows, and U.S. tariffs pressure the rupee, while India’s strong GDP, reforms, credit upgrade, and external balance support recovery. Near-term trend favours gradual rupee appreciation.