Forex traders said the ongoing uncertainty surrounding tariff imposition by the US has left financial markets in flux. Moreover, the tariff chaos has injected volatility and uncertainty into the US Dollar Index.
At the interbank foreign exchange, the rupee opened at 87.32, then fell to 87.37 against the American currency, registering a decline of 19 paise over its previous close.
On Thursday (February 27), the rupee settled almost flat with a marginal gain of 1 paisa at 87.18 against US dollar.
”The Indian rupee depreciated by 20 paise influenced by rising geopolitical tensions and the looming threat of trade wars,” CR Forex Advisors MD Amit Pabari said.
Moreover, the Reserve Bank of India is actively intervening near the 87.40 level to curb excessive depreciation of the rupee, Pabari said, adding that all eyes are on the upcoming economic data releases, including India’s GDP figures.
”The USD/INR pair is expected to remain at elevated levels, with strong support at 87.00 and resistance at 87.50-87.60, amidst rising geopolitical tensions,” Pabari said.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was at 107.35, higher by 0.10%.
Brent crude, the global oil benchmark, quoted 0.51% lower at $73.66 per barrel in futures trade.
In the domestic equity market, the 30-share BSE Sensex was trading 917.03 points or 1.23% lower at 73,695.40 in morning trade, while Nifty was lower by 272.15 points or 1.21% to 22,272.90.
Foreign Institutional Investors (FIIs) offloaded equities worth ₹556.56 crore in the capital markets on net basis on Thursday (February 27), according to exchange data.
On the global front, President Donald Trump plans to impose tariffs on Canada and Mexico starting Tuesday, in addition to doubling the 10 per cent universal tariff charged on imports from China.
The prospect of escalating tariffs has already thrown the global economy into turmoil – with consumers expressing fears about inflation worsening.
