Daijiworld Media Network- Mumbai
Mumbai, Feb 28: The Indian rupee weakened by 19 paise to 87.37 against the US dollar in early trade on Friday, pressured by the strength of the American currency and a downturn in domestic equities.
Forex analysts pointed to market volatility triggered by uncertainty over fresh tariff impositions by the US, which has impacted global financial sentiment. The US Dollar Index has also shown increased volatility amid the ongoing trade concerns.
At the interbank foreign exchange, the rupee opened at 87.32, before slipping to 87.37, marking a 19-paise decline from its previous close of 87.18 on Thursday.
Amit Pabari, MD of CR Forex Advisors, noted that the Indian rupee’s depreciation has been influenced by rising geopolitical tensions and the looming threat of trade wars. However, the Reserve Bank of India (RBI) is actively intervening near the 87.40 level to limit excessive rupee depreciation.
Pabari further stated that investors are now focusing on upcoming economic data releases, including India's GDP figures, which could impact forex trends.
“The USD/INR pair is expected to remain elevated, with strong support at 87.00 and resistance at 87.50-87.60, amid persistent geopolitical uncertainties,” he added.
• The Dollar Index, which measures the greenback’s strength against a basket of six major currencies, stood at 107.35, up by 0.10%.
• Brent crude oil prices slipped by 0.51% to $73.66 per barrel in futures trade.
• In the domestic equity market, the BSE Sensex dropped 917.03 points (1.23%) to 73,695.40, while the NSE Nifty declined 272.15 points (1.21%) to 22,272.90 in early trading.
Foreign Institutional Investors (FIIs) were net sellers, offloading Rs 556.56 crore worth of equities in the capital markets on Thursday, as per exchange data.
On the global front, US President Donald Trump has announced plans to impose fresh tariffs on Canada and Mexico from next week, in addition to doubling the 10% tariff on Chinese imports.
The possibility of escalating trade wars has raised concerns about global economic turmoil, with inflation fears growing among consumers worldwide.