Indian Rupee gives up early gains to close flat; ends at 87.66/$

Indian Rupee today: The domestic currency closed flat at 87.66 against the dollar on Monday after opening 16 paise higher

The Indian Rupee gave up early gains on Monday to end flat against the US dollar as trade tensions kept traders wary ahead of the Donald Trump-Vladimir Putin meeting later this week. 

 

The domestic currency closed flat at 87.66 against the dollar on Monday after opening 16 paise higher, according to Bloomberg. The rupee has depreciated by 2.4 per cent in the current financial year, whereas it has witnessed 2.2 per cent depreciation in the current calendar year.

 

US President Donald Trump said he plans to meet Russian President Vladimir Putin in Alaska on Friday to broker an agreement to end the war in Ukraine. Any ceasefire could be positive for India, as the additional 25 per cent tariff Trump levied on Russian oil purchases would be void.  Rupee traded flat, holding steady as recent weakness in the dollar index provided some support, according to Jateen Trivedi, VP research analyst - commodity and currency at LKP Securities. "Reports of possible US-Russia discussions on a Ukraine-Russia peace initiative helped the rupee remain stable despite an overall weak trend."

 

 

Investors brace for the key US Consumer Price Index (CPI) and Core CPI data on Tuesday, followed by the crude oil inventory figures on Wednesday. 

 

On the tariff front, Trump stated that no further trade negotiations will take place with New Delhi until the tariff issue is resolved. The dollar index, the measure of the greenback against a basket of six major currencies, was up 0.12 per cent at 98.29.

 

The Rupee is expected to be vulnerable in the short term as the US President's 50 per cent tariffs have triggered a risk-off sentiment from foreign portfolio investors (FPIs). FPIs have sold equities worth ₹17,924 crore so far this month. 

 

Meanwhile, as the Reserve Bank of India (RBI) curbs rupee weakness by selling dollars, exporters may sell near-term receivables, while importers may look to buy cash or weekly positions at the day’s lows, Anil Kumar Bhansali, head of treasury and executive director at Finrex Treasury Advisors LLP, said.

 

In commodities, crude oil prices extended declines as traders looked to upcoming talks between Russia and the US. Brent crude price was up 0.01 per cent at 66.60 per barrel, while WTI crude prices were lower by 0.06 per cent at 63.84, as of 3:40 PM IST.