Rupee Declines Against the US Dollar
The Indian rupee declines by 19 paise, reaching 87.37 against the US dollar in early trade on Friday. The decline was attributed to the strength of the American currency and a downward trend in domestic equities, which affected investor sentiment. Forex analysts highlighted ongoing concerns over trade policies by the United States, which have created volatility in global financial markets. The uncertainty surrounding potential tariff impositions has further contributed to fluctuations in the US Dollar Index, leading to a weaker rupee.
At the interbank foreign exchange market, the rupee opened at 87.32 before slipping to 87.37, marking a 19-paise decline from its previous close. On the preceding day, the rupee had settled almost unchanged, gaining just 1 paisa to close at 87.18 against the dollar.
Market and RBI Interventions
Market experts pointed to rising geopolitical tensions and trade-related concerns as key factors impacting the rupee’s performance. Amit Pabari, Managing Director of CR Forex Advisors, stated that the Indian currency faced downward pressure due to increasing global uncertainty. Additionally, the Reserve Bank of India (RBI) has been actively intervening near the 87.40 mark to prevent excessive rupee declines . Investors are closely watching upcoming economic indicators, including India’s Gross Domestic Product (GDP) data, for further insights into market trends.
The USD/INR exchange rate is expected to remain at elevated levels, with strong support at 87.00 and resistance between 87.50 and 87.60. The US dollar index, which measures the greenback’s performance against a basket of six major currencies, saw a slight increase of 0.10 percent, standing at 107.35. Meanwhile, Brent crude oil prices fell by 0.51 percent in futures trade, settling at USD 73.66 per barrel.
Impact on Domestic and Global Markets
Indian equity markets reflected the broader uncertainty, with the 30-share BSE Sensex dropping by 917.03 points, or 1.23 percent, to 73,695.40 in morning trade. Similarly, the Nifty index was down by 272.15 points, or 1.21 percent, at 22,272.90. Foreign Institutional Investors (FIIs) were net sellers in the capital markets, offloading equities worth Rs 556.56 crore on Thursday, according to exchange data.
Globally, concerns over trade restrictions continue to unsettle financial markets. The United States has announced plans to introduce tariffs on imports from Canada and Mexico starting next week, alongside a proposed increase in levies on Chinese imports. The escalation in trade measures has fueled fears of inflationary pressures and economic instability, impacting investor confidence worldwide. As markets navigate these uncertainties, analysts remain watchful of further developments that could shape currency movements and broader economic trends.
