Rupee rises after 4-day drop; capped at 85.39/$ on strong oil prices

Indian Rupee today: The domestic currency ended 19 paise higher at 85.39 against the greenback, after closing at 85.58 on Friday

Indian rupee gained after four straight days of decline as the US Dollar weakened after President Donald Trump's additional tariffs weighed on investors' sentiments. However, firm crude oil prices capped further gains in the currency. 

 

The domestic currency ended 19 paise higher at 85.39 against the greenback, after closing at 85.58 on Friday, according to Bloomberg. 

 

The dollar saw renewed pressure after US President Donald Trump announced that he would increase tariffs on steel and aluminium to 50 per cent from 25 per cent. The dollar index, which measures the greenback against a basket of six major currencies, was down 0.56 per cent at 98.76. 

 

Rupee remains in a consolidation mode with a broad range of 85-86, with the market awaiting an event to change the range, according to Anil Kumar Bhansali, head of treasury and executive director at Finrex Treasury Advisors LLP. "We await what the US Supreme Court has to say on Trump's Tariffs, although most of the time recently, he has sided with Trump."

 

The rupee was Asia’s worst-performing currency in May, falling nearly 1 per cent. The decline was led by a trio of tariff uncertainties, persistent border tensions, and rising expectations of monetary easing by the Reserve Bank of India (RBI), according to Amit Pabari, managing director at CR Forex Advisors. 

 

India’s real gross domestic product (GDP) growth for the fourth quarter (Q4) of financial year 2024-25 (FY25) stood at 7.4 per cent, the highest in one year. For the full financial year 2024-25, real GDP growth stood at 6.5 per cent, slightly below the Reserve Bank of India’s (RBI) projection of 6.6 per cent for the year. 

 

During the week, all eyes will be on the RBI's six-member monetary policy committee (MPC), which is expected to cut the repo rate by 25 basis points (bps) to 5.75 per cent. The committee, which will meet for three days from June 4, is scheduled to announce its policy review on Friday. A dovish RBI, in the face of global tightening concerns, is likely to keep the rupee under pressure, experts said. 

 

Crude oil prices extended their gains amid tariff tensions and a less-than-expected OPEC+ production hike. Brent crude price was up 3.38 per cent to $64.90 per barrel, while WTI crude prices were 3.68 per cent higher at 63.03, as of 3:30 PM IST.