Indian Rupee extend gains to close at 85.77/$; Ends 28 paise higher

Indian Rupee closed stronger on Tuesday, ending below the 86 mark, as tariff relief by US President Donald Trump buoyed sentiments among traders. 

 

The domestic currency strengthened 28 paise to end at 85.77 against the greenback after closing at 86.05 on Tuesday, according to Bloomberg data. The currency extended its momentum on Tuesday after registering the highest single-day gain in more than two years on Friday. 

 

Trump said he is considering temporary exemptions to tariffs on imported vehicles and parts to allow automakers additional time to establish manufacturing operations in the US. However, the tensions between the US and China are escalating, with the US now imposing a 145 per cent levy on goods from Beijing.  

 

The dollar index — a measure of the value of the US dollar relative to a basket of foreign currencies — was down 0.01 per cent at 99.62, as of 3:30 PM IST, its lowest level since April 2022. 

 

The Dollar Index plunged by 3.1 per cent to multi-month lows as the bond market threw a tantrum, Amit Pabari, managing director at CR Forex Advisors, noted. This unusual yield spike came not from expectations of higher rates but from recessionary fears and geopolitical unease, he said. 

 

The Indian rupee staged a sharp recovery last week, driven by the announcement of a 90-day delay on the imposition of reciprocal tariffs excluding China and a stronger Chinese yuan, Pabari said. However, recent economic data pointed a waning signs as India’s industrial production growth slowed to 2.9 per cent in February, the weakest in six months, Pabari added. "The rupee is expected to face a strong resistance at 86.40-86.50 levels and is likely to move towards 85.50 levels."

 

Crude oil prices continued to trade lower after edging higher in early trade on Tuesday. Brent crude oil was down 0.63 per cent to $64.47 per barrel, while WTI crude was down 0.63 per cent at 61.14 per barrel as of 3:35 PM IST.