The Indian rupee weakened on the first trading day of the fiscal year as traders assessed the impact of reciprocal tariffsinto effect today.

According to Bloomberg data, the domestic currency opened 21 paise weaker at 85.68 against the greenback, down from 85.47 on Friday. Tracking the fall in the dollar index, the currency rose by 2.39 percent in March, its best month since November 2018. Meanwhile, it fell by 2.42 percent over the last fiscal year.

At a White House event in the Rose Garden on Wednesday, US President Donald Trump is anticipated to unveil his reciprocal tariff plan. The White House has not yet finalized its tariff plan, according to media reports, and Trump's team is still considering their options before the event.

Acording to Anil Kumar Bhansali, head of treasury and executive director at Finrex Treasury Advisors LLP, the Indian rupee is expected to open slightly weaker as a result of Trump reciprocal tariffs, with investors watching to see how they will affect the country. The rupee benefited from broad dollar weakness and the Reserve Bank of India's (RBI) decision to allow for two-way movement without much intervention in March.

After falling 3.2% in March, the dollar index, which measures the value of the US dollar relative to a basket of foreign currencies, fell 0.07 percent to 104.18.

Any tariffs imposed on Indian goods could further weaken the rupee, but their removal would provide much-needed currency support, according to Amit Pabari, managing director at CR Forex Advisors. He predicted that the rupee would find strong support around 85.50-85.60, with a possible rebound to 86.00-86.20 levels, driven by rising crude prices and growing concerns about reciprocal tariffs.

Brent prices have risen by more than $6 per barrel since their recent lows, adding to concerns about rising inflation in India, according to Pabari. Crude oil prices remained relatively unchanged, halting last month's rally as traders' attention turned to the implications of 'liberation day'. Brent crude oil fell 0.04 percent to $74.46 per barrel, while WTI crude remained flat at 71.20 per barrel as of 9:10 a.m. IST.