Rupee slides to open at 86 mark amid tariff tensions; inflation data eyed

Indian Rupee today: The domestic currency opened 20 paise lower at 86 against the dollar on Monday, according to Bloomberg

The Indian Rupee slipped on Monday, falling to the 86 mark as tariff tensions kept traders on edge ahead of the consumer price inflation print. 

 

The domestic currency opened 20 paise lower at 86 against the dollar on Monday, according to Bloomberg. The rupee has depreciated by 0.59 per cent against the greenback in the current financial year, and has witnessed 0.47 per cent depreciation in the current calendar year.

 

The Indian rupee touched 83.90 on Friday before recovering to close at 83.80, marking a modest intra-day movement of 12 paise, analysts noted. While US President Donald Trump has imposed tariffs on several countries, India remains exempt for now, with negotiations ongoing to determine the potential tariff rate, Anil Kumar Bhansali, head of treasury and executive director at Finrex Treasury Advisors LLP, said. 

 

  Traders remained cautious after Trump's announcement of a 30 per cent tariff on imports from the European Union and Mexico, set to take effect from August 1. The EU postponed its 30 per cent retaliatory tariffs against the US to allow for further talks. The dollar index, a measure of the greenback against a basket of six major currencies, was up 0.08 per cent at 97.93.  

 

Meanwhile, the 1-month non-deliverable forward suggested an opening in the 85.90–85.94 range, according to Reuters. Most Asian currencies and equities declined on Monday.

 

"Exporters are expected to sell dollars near the 83.86–83.90 range as markets await further clarity from the Trump administration. Importers, meanwhile, are advised to wait for the State Bank of India's upcoming fundraise this week to potentially buy dollars at more favourable levels," Bhansali said. 

 

Macro data, including WPI Food Index, WPI Fuel, WPI Manufacturing, and retail inflation figures, will be keenly watched by investors. India’s consumer price index (CPI)-based retail inflation rate is likely to have cooled further in June, thus remaining below the 4 per cent target of the Reserve Bank of India (RBI) for a fifth consecutive month, giving the central bank wiggle room to focus on growth.   ALSO READ: Can Sensex fall below 80,000-mark in July? Here's what chart says 

In May, the retail inflation rate stood at a 75-month low of 2.82 per cent, while in June last year, it was 5.08 per cent.

 

In commodities, crude oil prices extended gains as investors weighed the prospects of additional US sanctions on Russia, amid trade tensions. Brent crude price was up 0.18 per cent at $70.49 per barrel, while WTI crude prices were higher by 0.18 per cent at 68.57, as of 9:05 AM IST. 

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