The US on Sunday stepped up pressure on trading partners to make new deals before the July 9 deadline, warning countries that higher tariffs could kick in on August 1, putting further pressure on the rupee.
However, a weaker greenback, lower global crude oil prices and the rise in the country’s forex reserves prevented further losses in the local unit, according to forex traders.
At the interbank foreign exchange, the domestic unit opened at 85.53 against the US dollar, before sliding further to 85.66, down 26 paise from its previous close. The rupee had settled at 85.40 against the greenback on Friday.
The latest move from the Trump administration furthers uncertainty for businesses, consumers and America’s trading partners, as questions remain about which countries will be notified, whether anything will change in the days ahead and whether President Donald Trump will once more push off imposing the rates.
“The rupee has been range-bound in the last few days within 85.30 to 85.60 with nationalised banks buying dollars on dips and exporters and other inflows selling the upticks… today’s range for the rupee is expected around 85.30-85.80,” Anil Kumar Bhansali, Head of Treasury and Executive Director, Finrex Treasury Advisors LLP, said. The dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.10 per cent to 97.08. “The dollar has been undermined by investors’ concerns about Trump’s often-chaotic tariff policy and what they might do to economic growth and inflation,” Bhansali said.
Brent crude, the global oil benchmark, was down 0.66 per cent to USD 67.85 per barrel in futures trade.
Meanwhile, in the domestic equity market, the Sensex declined 170.66 points to 83,262.23 in early trade, while Nifty was down 53.75 points to 25,407.25.
India’s forex reserves were up USD 4.84 billion to USD 702.78 billion for the week ended June 27, the Reserve Bank of India said on Friday.
Foreign institutional investors (FIIs) offloaded equities worth Rs 760.11 crore on a net basis on Friday, according to exchange data.
