Indian Rupee slipped on Wednesday following concerns about trade tensions and the rise of crude oil prices internationally. The domestic currency ended at 85.71 to the US dollar, 18 paise weaker than the previous close amid a nervous market attitude without an impending US reciprocal tariff deadline and an overall retreat by the Asian currencies.
The market closely monitored the events after the recent statement of the former US President Donald Trump. Trump again insisted that he is not having any second thoughts on the August 9 deadline of imposing higher tariffs on imports from India. This has caused alarm about possible trade friction between the two nations. Nevertheless, he alluded to a forthcoming US-India trade agreement with lower tariffs, much as a way of facilitating equal competition. Although the implications of such trades in the long term may not be so damaging, such uncertainty in the short term weighed down the mood in the market.
More of the Asian currency market showed the same weakness, whereby the majority of the units in the region went down after Trump’s tariff remarks. Indian Rupee, which already has depreciated by 0.21 per cent in June, continued losing ground and gave away 0.18 per cent in the first half of the calendar year.
In the meantime, the rise in crude oil prices mounted pressure on the Rupee. International oil standards were increased before the significant gathering of OPEC+, where the producing levels are likely to be determined in August. Brent crude futures were up 0.89 per cent to 67.71 per barrel, and WTI crude also rose 0.89 per cent to 66.03 per barrel at 3.35 PM IST. The increased prices of oil normally raise the import bill of India, thus expanding the trade gap and affecting the Rupee negatively.
The currency markets were also on the rise, with the US dollar index gaining 0.14 per cent to 96.95 amid soaring geopolitical and trade tensions, resulting in investor preference towards safe-haven currencies. The index is nevertheless down by more than 10.7% this year, showing larger volatility in the market also on Wednesday.
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