Rupee snaps two-month rally; reverses early gains to end lower at 85.36/$

Indian Rupee today: The domestic currency ended 6 paise lower at 85.36 against the US dollar, after closing at 85.52 on Thursday

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The Indian Rupee closed weaker for the fourth straight day on Friday, paring its early gains, even as the dollar weakened after US President Donald Trump's tariffs were reinstated. 

 

The domestic currency ended 6 paise lower at 85.36 against the US dollar, after closing at 85.52 on Thursday, according to Bloomberg. The currency also snapped two months of gains, as it weakened by over 1 per cent in May.

 

The currency ends stronger ahead of the crucial GDP data scheduled to be released later today. A better-than-expected GDP figure could spark a sharp appreciation in the rupee, particularly amid easing crude oil prices and a weakening dollar, according to Amit Pabari, managing director at CR Forex Advisors.  

 

On Thursday, the US Court of Appeals granted the Trump administration’s request to temporarily pause the trade court's ruling to block 'liberation day' tariffs. The US economy contracted in the March quarter, the first decline in three years. The dollar index, which measures the greenback against a basket of six major currencies, was up 0.31 per cent at 99.58. 

 

With See-saw tariff policies continuing to keep investors on edge, the dollar index has fallen 8 per cent this year. The greenback is heading for its fifth straight monthly loss as traders braced for further bouts of uncertainty around trade and fiscal health, experts said. 

 

Given these factors playing out, the rupee-dollar pair remains in a consolidation zone with resistance near 85.70-85.90 levels and strong support of 84.90-85.10 levels, Pabari said. "A breach on either side could pave a sharp movement in that direction." 

 

"We continue with the recommendation to sell dollars near 85.70/75 whenever we get the level, while we buy dollars on a cash basis," Anil Kumar Bhansali, head of treasury and executive director at Finrex Treasury Advisors LLP, said. "We need to hold hedging imports unless we get a level lower than 85.00 on the dollar rupee pair."

 

In commodities, crude oil prices rose after the appeals court temporarily reinstated tariffs. Brent crude price was up 0.41 per cent to $64.41 per barrel, while WTI crude prices were 0.56 per cent higher at 61.28, as of 3:43 PM IST.