The dollar index's upward surge limited the Indian Rupee's advance, which prevented it from closing below the 85 mark on Friday while closing better versus the US dollar.
According to Bloomberg statistics, the domestic currency closed at 85.44 on Thursday and gained 20 paise to conclude at 85.24 versus the US dollar. The Rupee dropped past the 85 mark in the first trading, reaching its highest level since December 2024 at 84.95 versus the dollar. The Rupee gained 0.45 percent so far in April after gaining 2.39 percent in March.
The dollar index, which compares the value of the US dollar to a basket of other currencies, rose 0.51% to 102.58 as the likelihood of a recession grew. The dollar index hit its lowest level since September 2024 earlier in the day, at 101.73.
This occurs one day after US President Donald Trump imposed a slew of tariffs, despite the fact that analysts ranging from JPMorgan to Bernstein predict that the US will face a greater danger of inflation and a recession. He said that almost all imports will be subject to tariffs of at least 10%, with higher rates applied to nations with the largest trade imbalances with the US.
According to Jateen Trivedi, VP research analyst-Commodity and Currency at LKP Securities, the rupee maintained its strength as a result of the currency's favorable trading and the decline in oil prices. "However, the favorable climb in the dollar index limited the rupee's potential for further appreciation." Markets are expected to remain cautious as non-farm payroll and unemployment figures are due for release in the evening, and the rupee may react dramatically depending on the outcome, he said.
Emmanuel Macron of France urged businesses to halt US investments after Trump's "discounted" tariffs were implemented, while Canada announced 25% retaliatory duties on certain US-made automobiles. According to Amit Padari, Managing Director of CR Forex Advisors, the retaliatory tariffs from trading partners may cause a slowdown in global trade, escalating concerns of a recession.
Due to a tariff announcement and OPEC+'s plan to boost supply more quickly than previously announced, crude oil prices dropped to their lowest level since August 2021. As of 3:30 PM IST, Brent crude oil was down 3.31 percent to $67.82 a barrel.
