Rupee logs worst day in nearly 2 weeks as tariff jitters lift dollar

Asian currencies were mostly weaker, with the offshore Chinese yuan down 0.4% astatine 7.28, portion the dollar scale roseate 0.1% to 107.9.

The dollar gained aft the Financial Times reported that U.S. Treasury Secretary Scott Bessent has been pushing for caller cosmopolitan tariffs connected U.S. imports to commencement astatine 2.5% and emergence gradually by the aforesaid magnitude each month.

Trump’s comments connected imposing tariffs connected U.S. copper and aluminium imports besides supported the dollar.

On Monday, the dollar scale had declined to an implicit five-week debased of 106.96 amid a selloff successful U.S. tech stocks.

With Trump’s instrumentality to the White House, “volatility is acceptable to persist successful markets and the rupee is improbable to enactment untouched,” a trader astatine a overseas slope said.

In summation to tariffs concerns, persistent outflows person besides been a symptom constituent for the rupee, with overseas investors pulling retired implicit $8.5 cardinal from section stocks and bonds truthful acold successful January.

Meanwhile, dollar-rupee guardant premiums dropped connected Tuesday aft the Reserve Bank of India announced a spate of measures to easiness a liquidity crunch. The 1-year dollar-rupee implied output declined 11 ground points to 2.17%.

The cardinal bank’s “liquidity easing is simply a apt precursor to complaint cuts,” Nomura said successful a note. The measures “confirm that determination has been a authorities displacement astatine the RBI, with the prioritisation of home rates implicit FX and a much flexible comparative attack to managing the currency.”