As the dollar gained strength following US President Trump's imposition of tariffs on China, Canada, and Mexico, the rupee broke through the crucial 87 to dollar mark on Monday. 

At 109.83, the dollar index jumped 1.35 percent. It gauges how strong the US dollar is in relation to a basket of six major currencies. 

At 10:31 IST, the rupee was worth 87.16 to the US dollar. 

"The worry about tariffs has materialized." A dealer at a state-owned bank stated, "There is demand for safe havens." 

Market participants warned that since the RBI has scaled back its intervention in the foreign exchange market, the rupee may continue to face pressure in the near future.

"The global market is destroyed by Trump's tariffs, and risk aversion hurts all assets, including gold and cryptocurrency, causing the Indian rupee to drop to its lowest level. Anil Kumar Bhansali, executive director and head of treasury at Finrex Treasury Advisors LLP," stated that the dollar is the most secure asset.

As supply worries were exacerbated by US tariffs on China, Canada, and Mexico, Brent crude oil prices increased toward $76 per barrel. However, market participants warned that as trade tensions worsen, crude prices might be under pressure to decline, which could slow global growth and reduce demand for energy.

The yield on government bonds, meanwhile, stayed constant at 6.67 percent.

"The increase in US yields has undermined the optimism surrounding the budget," a dealer at a state-owned bank stated.