Indian Rupee opens 20 paise weaker as dollar rises on tariff threats

The Indian Rupee opened weaker against the Dollar on Thursday as the latest US auto tariffs pushed the Dollar Index higher, along with rising crude oil prices. 

 

The domestic currency opened 20 paise weaker at 85.91 against the greenback after closing at 85.71 on Wednesday, according to Bloomberg data. The currency snapped its nine-consecutive day of gains on Tuesday, marking an end to the best winning streak since January 2024. 

 

The currency has appreciated by 1.86 per cent in March so far, tracking the fall in the dollar index. Meanwhile, during the current financial year, it witnessed a 2.1 per cent fall. 

 

The rupee should be range-bound unless the decision on the US delegation negotiating the tariffs comes out, according to Anil Kumar Bhansali, head of treasury and executive director at Finrex Treasury Advisors LLP. "An adjustment in spot due to year-end premium is expected apart from a falling risk appetite." US President Donald Trump on Wednesday said he was placing a 25 per cent tariff on auto imports.  

 

 

The dollar surged to a three-week high following Trump’s tariff announcement. The dollar index — a measure of the value of the US dollar relative to a basket of foreign currencies — was up 0.19 per cent at 104.35. The dollar index was weakened by 3.26 per cent in March, the highest since November 2022. 

 

Global markets are once again reeling from the uncertainty brought on by Trump’s tariff policies, Amit Pabari, managing director at CR Forex Advisors, noted. The move has reignited fears of a global trade war, fuelling inflation concerns and causing ripples across currency markets, he added.  

 

Given the current global and domestic market dynamics, the rupee-dollar pair is expected to find strong support around 85.40-85.50, with the potential for a rebound towards 86.50 in the short term, Pabari said. "In the medium term, any uptick in dollar/rupee could present selling opportunities, while a continued improvement in India’s economic fundamentals may push the rupee toward 85.20."

 

Foreign institutional investors remained net buyers of ₹2,240.55 crore from Indian equities on Wednesday. Global funds have pulled out ₹1.27 trillion from domestic stocks so far this year. 

 

Crude oil prices remained on the higher side with Trump threatening tariffs on countries purchasing oil and gas from Venezuela. Brent crude oil was up 0.09 per cent to $73.89 per barrel, while WTI crude was up 0.17 per cent at 69.77 per barrel as of 9:10 AM IST.