Rupee falls on tariff jitters, uptick in oil prices; ends lower at 85.71/$

Indian Rupee today: The domestic currency closed 18 paise lower at 85.71 against the dollar, according to Bloomberg

The Indian Rupee traded weak on Wednesday as caution loomed over the US reciprocal tariff deadline, along with an increase in crude oil prices.

 

The domestic currency closed 18 paise lower at 85.71 against the dollar, according to Bloomberg. Most Asian currencies declined on Wednesday amid Trump's comments on extending the tariff deadline. 

 

The unit has depreciated by around 0.21 per cent in June and has fallen by 0.18 per cent in the first six months of the calendar year.

 

Rupee traded weak as the Dollar Index showed strength near 96.50 and crude oil found some basing support, adding pressure on the rupee, according to Jateen Trivedi, VP research analyst - commodity and currency at LKP Securities. "Additionally, weakness in domestic capital markets contributed to the currency’s softness." 

   

Market focus now shifts to key US data releases this week, including non-farm payrolls, unemployment rate, and ADP employment data, which will likely guide dollar movements, Trivedi said. "Rupee is expected to trade in the range of 85.20 to 85.85." 

 

Trump said he is not considering delaying his July 9 deadline for higher tariffs to resume. He also added that the US and India will soon finalise a trade deal with “much lower tariffs,” which would enable fairer competition between the two countries. 

 

With no clear directional cues, the rupee is expected to remain range-bound between 85.35 and 85.95, according to Anil Kumar Bhansali, head of treasury and executive director at Finrex Treasury Advisors LLP. The Reserve Bank of India's (RBI's) outstanding net short dollar position in the forward market fell further to $45 billion by the end of May, against $52 billion at the end of April, according to the central bank’s latest data.

 

The dollar index traded marginally higher as Trump escalated trade tensions. The measure of the greenback against a basket of six major currencies was up 0.14 per cent at 96.95. The index has fallen 10.74 per cent so far this year.

 

In commodities, crude oil prices were trading higher ahead of the Opec+ meeting to determine the August output levels. Brent crude price was up 0.89 per cent at $67.71 per barrel, while WTI crude prices were higher by 0.89 per cent at 66.03, as of 3:35 PM IST.