Post by : Jyoti Gupta

The Indian rupee came under renewed pressure on Tuesday, slipping against the US dollar as markets reacted to geopolitical developments surrounding the US-India trade negotiations and President Donald Trump’s firm stance on tariffs.

The domestic currency opened 6 paise lower at ₹85.59 per dollar, according to early data. The decline follows a broader weakening trend across Asian currencies, sparked by Trump’s announcement that the July 9 deadline for imposing higher tariffs will not be extended.

The rupee has depreciated by around 0.21% in June and by 0.18% in the first half of 2025, reflecting cautious sentiment in the foreign exchange markets.

President Trump also hinted that a new trade deal between India and the United States is nearing completion. He stated that the agreement would introduce significantly lower tariffs, allowing for fairer competition and a more balanced trade relationship between the two countries.

Market volatility persisted throughout the day, with traders closely watching the rupee’s movement. Buying interest emerged below ₹85.50, with several state-owned banks seen purchasing dollars. On the other hand, gains in the greenback were sold into, especially as the dollar index continued its downward slide.

According to analysts, the rupee is likely to remain range-bound in the near term, fluctuating between ₹85.35 and ₹85.95 due to the lack of strong directional signals.

Data from the Reserve Bank of India (RBI) revealed that its net short dollar position in the forward market fell to $45 billion by the end of May, down from $52 billion at the end of April.

Investors are now looking ahead to key US economic indicators expected later this week, including non-farm payrolls, the unemployment rate, and ADP employment data, all of which could influence the trajectory of the dollar. Additionally, remarks from US Federal Reserve Chair Jerome Powell—who noted that interest rate cuts may have already been implemented if not for Trump’s tariff push—are being closely monitored.

Meanwhile, the dollar index, which measures the US currency against a basket of six major currencies, dropped further by 0.14% to 96.68, marking a 10.93% decline so far this year.

In commodity markets, crude oil prices edged higher ahead of the OPEC+ meeting, where member nations are expected to decide on production levels for August. Brent crude rose by 0.06% to $67.15 per barrel, while WTI crude was up 0.03% at $65.47 as of 9:15 AM IST.