Indian Rupee sees worst start in nearly 2 months; Opens 41 paise lower

The Indian rupee posted its weakest opening in nearly two months as escalating fears over global trade tensions intensified following China’s retaliatory tariffs on US goods. The rupee depreciated even as crude oil prices have been on a steady fall. 

 

The domestic currency weakened 41 paise to open at 85.65 against the greenback after closing at 85.24 on Friday, according to Bloomberg data. This marks the worst opening losses for the currency since February 10 this year. Indian rupee has fallen by 0.3 per cent in April so far after seeing a 2.3 per cent gain in the previous month. 

 

 

After US President Donald Trump hit China with a 54 per cent to cripple exports to the US, Beijing retaliated with a 34 per cent tariffs on all US imports. Meanwhile, the Reserve Bank of India's (RBI's) Monetary Policy Committee (MPC) meeting starting today will be on investors' radar.  

 

The Indian rupee, which had fallen slightly on Friday, is set to open weaker at 85.73 on account of risk aversion and risk-off sentiments, according to Anil Kumar Bhansali, head of treasury and executive director at Finrex Treasury Advisors LLP. “The range for the day is expected between 85.50/86.00 with $ getting bought on dips.” 

 

A foreign institutional investor (FII) outflow of ₹3,483.98 crore from Indian equities also sparked pressure on the rupee. Further, a hawkish signal from key Federal Reserve officials cast a wider shadow on emerging market currencies, according to Amit Pabari, managing director at CR Forex Advisors. 

 

The dollar index rose as the US Federal Reserve hinted that there isn’t any hurry to pivot, Pabari said. “These tones lent strength to the U.S. dollar index (DXY), dampening sentiment for the rupee.” In the near term, a rebound towards 86.00–86.20 levels is possible. With 85.00 holding as a strong support at the downside, he said.  

 

Crude oil prices extended their rout as Saudi Arabia slashed its flagship crude price by the most in more than two years amid global recession fears. Brent crude oil was down 2.74 per cent to $63.78 per barrel, while WTI crude was down 2.79 per cent at 60.26 per barrel as of 9:18 AM IST. 

 

On the equities front, the Japanese futures was suspended due to the market hitting circuit breakers. The benchmark Nikkei 225 lost 5.92 per cent, with the Hang Seng Index declining 8.95 per cent. Meanwhile, mainland China’s CSI 300 fell 5.41 per cent.