On Friday, the Indian Rupee ran out of steam following the gains made in the previous session, as it ended the day at 85.39 against the US dollar, 7 paise lower than the opening lag. In spite of the intraday weakness, the rupee gained for the 2nd straight week, mainly on account of the broad-based losses the dollar sustained, followed by some mixed signals in the global markets.
As per the market statistics, a depreciation in the domestic currency is observed by an average of 0.21 per cent in June and 0.18 per cent in the initial period of the 2025 calendar year. It was observed by traders that the short-term mechanism of the rupee has been sensitive to any worldwide events, particularly changes in the trade policy and the changing direction of crude oil.
Asian currencies were trading both lower and higher on Friday as speculators were wary ahead of the looming US reciprocal tariff cutoff date. To further avert the confusion, there are speculations that the trade agreement that was signed recently between the US and Vietnam marks unhappiness in emerging markets. The agreement will consist of a 20 per cent tariff on export products to the US and a big 40 per cent duty on transshipped goods, which is considered to be a protectionist measure and can be viewed as inflationary.
In the meantime, the old US President Donald Trump stated that a US-India trade deal should be completed soon, with the provisions of much lower tariffs, although details are not clear yet. This news brought within reasonable range some of the pressure it faced against the rupee, but the overall investor sentiment was downbeat.
The dollar index that tracks the strength of the greenback in comparison with six other major currencies managed to fall by 0.26 per cent to 96.93, indicating weakened investor confidence. The index has declined by 10.86 per cent year-to-date, and this is an indication of the continued softness in the dollar.
The price of crude oil cruised in the commodities market. Brent crude fell 1.16 per cent to $68.00 a barrel, and WTI crude dropped by 1.10 per cent to $66.26, by 3:42 PM IST, as the US data on jobs and the current conflicts of tariffs were witnessed.
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