Rupee under pressure despite US-India trade talk hopes; opens at 88.13/$

Indian Rupee today: The domestic currency opened 2 paise lower at 88.13 against the greenback on Wednesday

The Indian Rupee traded slightly weaker on Wednesday, despite positive signals from US President Donald Trump on the possible resumption of trade talks with India.

 

The domestic currency opened 2 paise lower at 88.13 against the greenback on Wednesday, according to Bloomberg. So far this year, the rupee has depreciated 2.94 per cent, making it the worst performer among Asian peers. 

The currency, which opened stronger at 87.95 on Tuesday, slipped to nearly 88.20 as continued dollar demand from foreign portfolio investors (FPIs) and importers weighed on the currency. 

  

In a post on Truth Social, Trump said, "I feel certain that there will be no difficulty in coming to a successful conclusion for both of our great countries," adding he intends to speak to Indian Prime Minister Narendra Modi "in the coming weeks".

 

   

Modi, in a post on X, commented that he is "confident" that the trade negotiations "will pave the way for unlocking the limitless potential of the India-US partnership."

 

The optimism was, however, mixed as Trump urged European Union leaders to join him in increasing tariffs on India and China to punish the countries for buying Russian energy. 

 

Despite Trump's comment that negotiations with India on trade barriers were progressing, the rupee looks under pressure, Anil Kumar Bhansali, head of treasury and executive director at Finrex Treasury Advisors LLP, said. With the Reserve Bank of India (RBI) seen defending the 88.20-88.30 range, the rupee could recover towards 87.80, supported by a 101-point higher opening in Gift Nifty, he said. 

 

Foreign Portfolio Investors turned net buyers in Indian equities worth ₹2,050.46 crore on Tuesday, the first time this month. So far this year, FPIs sold equities worth ₹1.4 trillion, according to NSDL. Asian currencies were also marginally lower, likely keeping buying interest in dollars at dips in the rupee, Bhansali said. 

 

Investors await US data on crude oil inventories, wholesale inventories, and the Producer Price Index (PPI). 

 

The dollar rose slightly after a US court blocked Trump from removing Federal Reserve Governor Lisa Cook. The dollar index, a measure of the greenback against a basket of six major currencies, was down 0.04 per cent at 97.76. 

 

In commodities, crude oil prices rose after Israel conducted a strike against senior Hamas leaders in Doha, Qatar. Brent crude price was up 0.86 per cent at 66.96 per barrel, while WTI crude prices were higher by 0.93 per cent at 63.21 per barrel, as of 9:10 AM IST.