Rupee gains amid fresh tariff jitters; opens 11 paise higher at 85.75/$

Indian Rupee today: The domestic currency opened 11 paise higher at 85.75 against the dollar on Monday

The Indian Rupee eased after seeing a sharp fall on Monday amid fresh global trade tensions as US President Donald Trump threatened higher tariff rates on trading partners, effective August 1.

 

The domestic currency opened 11 paise higher at 85.75 against the dollar on Tuesday, a day after seeing the worst fall since June 13, according to Bloomberg. In the previous session, the currency fell past the 86 mark during the intraday trades. The currency was among the top gainers among its Asian peers.

 

Japan, South Korea, Malaysia and Kazakhstan would pay a 25 per cent levy on their exports to the US. Indonesia will face 32 per cent tariffs, Bangladesh 35 per cent, and Cambodia and Thailand 36 per cent tariffs each. 

 

 

There is no word yet on India, but Trump said that the US is close to making a deal. However, on Monday, Trump threatened to slap additional levies on countries aligned with the Brics group, of which India is a member.  

 

The Indian Rupee recovered towards the close yesterday, after slipping to 86.04 earlier in the session due to strong dollar demand, resulting in a loss of about 70 paise, analysts noted. 

 

Dollar buying by oil companies and importers weighed on the currency, although possible dollar sales by the Reserve Bank of India (RBI) towards the end helped the Rupee rebound, Anil Kumar Bhansali, head of treasury and executive director at Finrex Treasury Advisors LLP. 

 

The Rupee opened slightly stronger at 85.76, supported by a recovery in Asian currencies, Bhansali said. "The currency is expected to trade within a range of 85.40 to 86.00. Exporters are advised to sell dollars above 86.00, while importers may wait, as the broader 85–86 range continues to hold."

 

The dollar index traded firm after Trump's fresh tariff threats. The dollar index, the measure of the greenback against a basket of six major currencies, was down 0.17 per cent at 97.31. The index has fallen 10.52 per cent so far this year. All eyes are now on the upcoming Fed meeting minutes, which could guide dollar direction further. 

 

In commodities, crude oil prices traded slightly lower after Opec+ decided on a bigger-than-expected production increase. Brent crude price was down 0.29 per cent at $69.38 per barrel, while WTI crude prices were lower by 0.37 per cent at 67.68, as of 9:10 AM IST.