Rupee recoups early losses to close stronger; ends higher at 85.68/$

Indian Rupee today: The domestic currency closed 2 paise higher at 85.68 against the dollar on Wednesday

Indian Rupee pared early losses on Wednesday to closes slightly higher after US President Donald Trump reiterated the 10 per cent additional tariff on Brics countries, which India is a part of. 

 

The domestic currency closed 2 paise higher at 85.68 against the dollar on Wednesday, according to Bloomberg. The rupee has depreciated by 0.27 per cent against the greenback in the current financial year, and has witnessed 0.08 per cent depreciation in the current calendar year.

 

A vigilance is warranted as the US Dollar Index strengthens and long-term US and Japanese bond yields surge, potentially sparking risk-off sentiment in global markets, according to Anindya Banerjee, head of currency and commodity, Kotak Securities. "We anticipate dollar-rupee to trade within a 85.50–86.50 range on the spot market, with an upward bias."

   

Donald Trump said he would not offer extensions on country-specific levies, which will be effective in August. He slapped a 50 per cent levy on imports of copper, sending the commodity futures to their largest intraday gain in many decades. Drug companies could face a tax as high as 200 per cent. 

 

Even as he reiterated that a deal with India is close, US President Donald Trump said the South Asian country will face an additional 10 per cent levy for its participation in Brics.

 

The rupee gained on Tuesday on expectations of an announcement of the US-India mini trade deal, but no such update came through overnight, according to Anil Kumar Bhansali, head of treasury and executive director at Finrex Treasury Advisors LLP. 

 

The dollar index gained on the tariff announcement. The measure of the greenback against a basket of six major currencies was up 0.5 per cent at 97.56. Most Asian currencies traded lower, while equity markets across the region posted mixed trends. 

 

Investors eye the FOMC Minutes, API crude oil stock change, and consumer credit change from the US, as well as inflation data from China.

 

In commodities, oil prices reached a two-week high driven by supply concerns from fresh Houthi attacks on Red Sea shipping lanes. Brent crude price was up 0.37 per cent at $70.41 per barrel, while WTI crude prices were higher by 0.42 per cent at 68.62, as of 3:45 PM IST.