Rupee snaps three-day gains as tariff tensions weigh; ends at 85.80/$

Indian Rupee today: The domestic currency closed 15 paise lower at 85.80 against the dollar on Friday

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Indian Rupee snapped a three-day winning streak as renewed tensions continued to keep investors on the edge. 

 

The domestic currency closed 15 paise lower at 85.80 against the dollar on Friday, according to Bloomberg. The rupee has depreciated by 0.36 per cent against the greenback in the current financial year, and has witnessed 0.19 per cent depreciation in the current calendar year.

 

Trump said in an interview with NBC News on Thursday that he plans to impose blanket levies of 15 per cent or 20 per cent. The President also announced 35 per cent tariffs on Canada, effective August 1, and warned of higher levies if Ottawa retaliates.

   

The rupee is expected to open lower after former US President Donald Trump reignited trade tensions by imposing tariffs on Canada, triggering a broad sell-off across asset classes, analysts said.  

 

Rupee traded weak as capital market weakness, along with higher gold and silver prices and weak global cues, weighed on sentiment, according to Jateen Trivedi, VP research analyst - commodity and currency at LKP Securities. The rise in tariffs from the US on Brazil and Canada has added uncertainty, and markets will remain cautious until constructive trade talks emerge, he said. 

 

"Additionally, the dollar index has shown recovery, which has added pressure on emerging market currencies. Rupee is expected to trade in a range of 85.25 to 86.20," Trivedi said. The dollar index, a measure of the greenback against a basket of six major currencies, was up 0.13 per cent at 97.78. 

 

On Wednesday, Brazil was hit with a 50 per cent levy, while Trump imposed a 30 per cent tariff on Algeria, Libya, and Iraq. Sri Lanka was hit with 25 per cent duties. Trump also said the US would begin levying a 50 per cent tariff on copper imports from August 1.   

 

Investors are eyeing updates on the Fed balance sheet, while in the UK, GDP, trade, and production data are expected.

 

In commodities, oil prices pared losses after falling from a two-week high as the market expects lower demand due to the tariff issue, with Opec+ ramping up output. Brent crude price was up 0.28 per cent at $68.83 per barrel, while WTI crude prices were higher by 0.35 per cent at 66.80, as of 3:35 PM IST.