The Indian rupee opened lower against the US dollar on Thursday, as the latest US auto tariffs pushed the Dollar Index higher, along with rising crude oil prices.
According to Bloomberg data, the domestic currency opened 20 paise weaker at 85.91 against the greenback, down from 85.71 on Wednesday. On Tuesday, the currency ended its nine-day winning streak, which had been the best since January 2024.
So far in March, the currency has risen by 1.86 percent, tracking the decline in the dollar index. Meanwhile, during the current fiscal year, it fell 2.1%.
The rupee should remain range-bound until the decision on the US delegation negotiating tariffs is made, according to Anil Kumar Bhansali, head of treasury and executive director at Finrex Treasury Advisors LLP. "An adjustment in spot due to year-end premium is expected apart from a falling risk appetite." On Wednesday, US President Donald Trump declared that he would levy a 25% tax on imported automobiles.
When Trump announced tariffs, the dollar hit a three-week high. The US dollar's value in relation to a basket of other currencies is measured by the dollar index, which increased 0.19 percent to 104.35. The dollar index fell by 3.26 percent in March, the most since November 2022.
Global markets are once again reeling from the uncertainty caused by President Trump's tariff policies, according to Amit Pabari, managing director of CR Forex Advisors. The move has reignited fears of a global trade war, exacerbated inflation concerns, and caused ripples in currency markets, he added.
Pabari believes the rupee-dollar pair will find strong support between 85.40 and 85.50, with a short-term rebound to 86.50, given the state of the domestic and international markets. "Any increase in the dollar/rupee could offer selling opportunities in the medium run, while the rupee might move toward 85.20 if India's economic fundamentals continue to improve."
On Wednesday, foreign institutional investors made a net purchase of ₹2,240.55 crore in Indian stocks. Global funds have withdrawn ₹1.27 trillion from domestic stocks this year.
Crude oil prices remained high, with Trump threatening tariffs on countries that buy oil and gas from Venezuela. Brent crude oil was up 0.09 percent to $73.89 per barrel, while WTI crude was up 0.17 percent to 69.77 per barrel as of 9:10 a.m IST.
