Rupee ends 38 paise lower at 84.82/$; border tensions weigh on currency

The domestic currency opened 38 paise lower at 84.82 after ending at 84.44 against the greenback on Tuesday

Indian rupee closed lower on Wednesday as tension flared up on the border after India's precision strikes against Pakistan following last month’s Kashmir terror attack.

 

The domestic currency ended 38 paise lower at 84.82 after closing at 84.44 against the greenback on Tuesday, according to Bloomberg data. 

 

Indian armed forces are fully prepared to respond to any possible Pakistani misadventures that will escalate the situation, military officials said on Wednesday at an official briefing on ‘Operation Sindoor’. 

 

The Indian armed forces launched a series of strikes on terror infrastructure in Pakistan and Pakistan-occupied Kashmir (PoK) in the early hours of Wednesday. A total of nine sites were targeted by the Indian armed forces. The armed forces said the strikes were “focused, measured and non-escalatory”, and specifically avoided civilian and military facilities.  

 

The military strikes against terrorist camps in Pakistan and POK bring focus on the escalation of conflict on to rupee, according to Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP. 

 

Meanwhile, the US Dollar Index remains capped below 100.00, still stuck in a wait-and-see range, according to Kunal Sodhani, vice-president of Shinhan Bank. The dollar index — a measure of the value of the US dollar relative to a basket of foreign currencies — was down 0.24 per cent at 99.48. 

 

In the first confirmed trade talks, US Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer will travel to Switzerland later this week for negotiations with China, led by Vice Premier He Lifeng. 

 

Federal Reserve commentary is important to watch today for future rate trajectory, Sodhani said, adding that 84.25 acts as a support for the rupee while 84.90 a resistance, followed by 85.20 levels. Investors expect Fed officials to remain status quo on key rates as they await clarity on trade policies. 

 

In commodities, crude oil prices rose a day after the US cut its forecast for domestic crude production this year. Brent crude price was up 0.42 per cent to $62.41 per barrel, while WTI crude prices were higher by 0.56 per cent at 59.42, as of 3:40 PM.