Rupee snaps three-day gains on Tariff jitters; opens lower at 85.82/$

Indian Rupee today: The domestic currency opened 17 paise lower at 85.82 against the dollar on Friday

The Indian rupee snapped three days of gains on Friday as fresh tariff jitters by the US President Donald Trump spooked traders. 

 

The domestic currency opened 17 paise lower at 85.82 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 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. Asian equities, forex, and rates markets have largely seen a muted reaction. The one-month non-deliverable rupee forward was trading at 85.85 against the dollar and onshore one-month forward premium at 9 paise, according to Reuters. 

 

On Thursday, the rupee briefly strengthened to 85.53 on the back of foreign portfolio inflows but ended the session weaker at 85.69 as oil companies stepped up dollar demand, Anil Kumar Bhansali, head of treasury and executive director at Finrex Treasury Advisors LLP. "Exporters may consider selling near the 86.00 level, while importers could look to buy around 85.50 if the opportunity arises today."

 

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 it fell from 2 weeks high as the market expects lower demand due to the tariff issue, with Opec+ ramping up output. Brent crude price was up 0.39 per cent at $68.91 per barrel, while WTI crude prices were higher by 0.48 per cent at 66.89, as of 9:15 AM IST.