The Indian rupee appreciated by 61 paise to 86.84 against the US dollar in early trade on Tuesday, recovering from its recent decline near the 88-level on Monday. The currency witnessed high volatility as escalating trade war fears and protectionist measures disrupted global markets, impacting foreign exchange trends significantly. Analysts attributed the rupee’s depreciation to heightened concerns over global supply chain disruptions, triggered by reciprocal tariff threats.
At the interbank foreign exchange, the rupee opened at 87.45 against the US dollar before strengthening to 86.84 in morning trade, marking a 61 paise gain from its previous closing level.
On Monday, the Indian rupee had plunged by 45 paise, inching closer to the 88-mark due to a strong US dollar and trade-related uncertainties. However, it settled at 87.45, gaining 5 paise by the end of the session, following intervention by the Reserve Bank of India.
“As the USD/INR pair approached 88, the RBI stepped in, utilizing its substantial foreign exchange reserves of USD 630 billion and a 10-month import cover. The central bank reportedly sold USD 2-3 billion to mitigate volatility, stabilizing the rupee and restoring market confidence,” said Amit Pabari, MD of CR Forex Advisors.
Pabari further stated that the rupee is expected to trade at elevated levels of 87.95-88.20 in the near term, with key support levels at 87.20-87.40. “A sustained move below the 87.00 mark would indicate the beginning of a trend reversal,” he added.
Meanwhile, the US dollar index strengthened to 108.40, reflecting heightened trade tensions following the implementation of 25 percent tariffs on aluminum and steel imports. The dollar index, which measures the greenback’s value against a basket of six major currencies, was trading 0.11 percent higher at 108.44.
In the commodities market, Brent crude, the global oil benchmark, inched up by 0.25 percent to USD 76.06 per barrel in futures trade.
On the domestic front, Indian stock markets faced downward pressure, with the BSE Sensex dropping 199.89 points (0.26 percent) to 77,111.91, while the Nifty declined 73.10 points (0.31 percent) to 23,308.50.
Additionally, foreign institutional investors (FIIs) continued their selling spree, offloading equities worth Rs 2,463.72 crore on a net basis in the capital markets on Monday, as per exchange data.
news source by:- MSN
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