Rupee falls for second day as dollar climbs after Fed cut; opens at 88.20/$

The Indian Rupee extended losses on Friday as the dollar strengthened after mixed signals from the US Federal Reserve. 

 

The domestic currency opened 7 paise lower at 88.20 against the greenback on Friday, according to Bloomberg. So far this year, the rupee has depreciated 2.97 per cent, making it the worst performer among Asian peers.

 

The rupee is expected to remain under pressure and could trade in the range of 88 to 88.40 as another Reserve Bank of India (RBI) rate cut is on the horizon in the next policy meeting, Anil Kumar Bhansali, head of treasury and executive director at Finrex Treasury Advisors LLP, said.

   

The rupee traded weak despite the dollar index remaining soft post-Fed policy, as forward rate cut guidance remained mixed, Jateen Trivedi, VP Research Analyst - Commodity and Currency at LKP Securities, said. "The roadmap for further cuts by the Fed was unclear and data-dependent on jobs."  

 

Jerome Powell cut interest rates by 25 basis points and pencilled in two more reductions this year. Powell said that the labour market is showing growing signs of weakness, stating that revised job numbers mean it is no longer "very solid." 

 

Going ahead, the Fed dot plot indicated two more rate cuts in the rest of 2025, one cut each in 2026 and 2027, and no cuts in 2028. The dollar index, a measure of the greenback against a basket of six major currencies, was up 0.01 per cent at 97.33.

 

On the trade front, Chief Economic Advisor (CEA) V Anantha Nageswaran on Thursday expressed confidence that India-US tariff discussions would conclude within the next couple of months. He also said the reciprocal tariff could come down to the earlier-anticipated range of 10-15 per cent.

 

On Tuesday, the chief negotiators of India and the US decided to intensify efforts to reach an early conclusion of a “mutually beneficial” trade deal. 

 

In commodities, crude oil prices were lower amid concerns about oversupply and rising US fuel inventories. Brent crude price was down 0.15 per cent at 67.34 per barrel, while WTI crude prices were lower by 0.17 per cent at 63.46 per barrel, as of 9:13 AM IST.