Rupee gives up early gains; ends lower at 87.60/$ on tariff worries

Indian Rupee today: The domestic currency closed 7 paise lower at 87.60 against the dollar on Monday, according to Bloomberg

The Indian Rupee gave up early gains on Monday and ended lower, as concerns over additional tariffs outweighed advances from the Federal Reserve Chair's rate cut signals.

 

The domestic currency closed 7 paise lower at 87.60  against the dollar on Monday, according to Bloomberg. The unit, however, opened 14 paise higher. The Rupee has slipped 2.15 per cent in the current financial year and 2.30 per cent in 2025 so far. In August, it rose around 0.20 per cent against the dollar.

 

While the rupee opened with a minor gap-up, it quickly gave up gains as dollar strength resurfaced, according to Jateen Trivedi, VP Research Analyst - commodity and currency at LKP Securities. "Persistent FII outflows, with foreign investors remaining net sellers in the Indian market, continue to weigh on sentiment. Additionally, renewed concerns over the US tariff stance on India are further curbing rupee upside potential." 

 

   

Expectations of a Federal Reserve rate cut offered some reprieve, while the Reserve Bank of India (RBI) is seen actively intervening to curb excessive depreciation, which limited the downside, Anil Kumar Bhansali, head of treasury and executive director of Finrex Treasury Advisors LLP, said. However, if outflows accelerate following the additional 25 basis points trade tariffs imposed by the Trump administration from August 27, the dollar–rupee pair could move higher, he said.  

 

Fed Chair Jerome Powell left the door open for rate cuts at the Jackson Hole summit in Wyoming on Friday. Powell hinted at a shifting balance of risks, warning that the policy stance would be adjusted after the weak employment figures. He also emphasised the ongoing risk of higher inflation spurred by President Donald Trump’s tariffs. The FOMO will meet on September 16-17, with traders seeing an 84 per cent chance of a rate cut, as per Bloomberg. 

 

The dollar index, a measure of the greenback against a basket of six major currencies, was up 0.21 per cent at 97.92.

 

In commodities, oil prices rose after Ukraine attacked Russia's Nuclear plant, thus fanning concerns that Russian oil supply could be disrupted. Brent crude price was up 0.28 per cent at 67.92 per barrel, while WTI crude prices were higher by 0.35 per cent at 63.88 per barrel, as of 3:35 PM IST. 

Weekly cues

On the economic front, the US will release its house price index data for June (Monday), Q2 gross domestic product (GDP) data (Thursday), and personal consumption expenditure price index for July (Friday). Back home, India will release its industrial and manufacturing production for July (Thursday) and Q2 GDP (Friday).