Rupee The rupee traded in a tight range and fell 5 paise to 87.63 against the US dollar with depreciation pressures still lingering
MUMBAI — The rupee traded in a tight range and fell 5 paise to 87.63 against the US dollar with depreciation pressures still lingering amid persistent trade uncertainty and a firm US dollar backdrop.
Forex traders said the rupee is trading in a narrow range as the Reserve Bank of India is protecting it at around the 87.95 level, while sustained foreign fund outflows are dragging the local unit lower.
At the interbank foreign exchange market rupee opened at 87.56, then touched an intra-day low of 87.63 against the US dollar in initial trade, lower by 5 paise from its previous close.
On Thursday, the rupee settled 14 paise higher at 87.58 against the US dollar.
"The Indian rupee was largely unchanged in Thursday’s session, holding its ground despite fresh headwinds from additional US tariffs. Steadying moves from the central bank likely helped contain volatility, even as global cues turned less friendly for emerging market currencies," CR Forex Advisors MD Amit Pabari said.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, declined 0.27 per cent to 98.13.
Brent crude, the global oil benchmark, was down 0.17 per cent at USD 66.32 per barrel in futures trade.
"Given the prevailing conditions, the rupee may attempt a pullback toward the 87.50 range in the near term. Immediate support lies at 87.20 -- a decisive break below this level would be needed to signal a meaningful shift in trend.
"On the upside, resistance is seen at 87.70, with depreciation pressures still lingering amid persistent trade uncertainty and a firm US dollar backdrop," Pabari added.
On the domestic equity market front, the Sensex declined 242.24 points to 80,381.02 in early trade, while the Nifty dropped 54.85 points to 24,541.30.
Foreign institutional investors (FIIs) offloaded equities worth Rs 4,997.19 crore on a net basis on Thursday, according to exchange data.
Meanwhile, US President Donald Trump has ruled out the possibility of trade negotiations with India, until the issue of tariffs is resolved.
“No, not until we get it resolved,” Trump said in the Oval Office on Thursday in response to a question on whether he expects increased trade negotiations with India since he has announced 50 per cent tariffs on the country.
Last week, Trump had announced 25 per cent reciprocal tariffs on India that came into effect from August 7.
The US president also signed an executive order slapping an additional 25 per cent levy on India for New Delhi’s purchases of Russian oil, bringing the total duties to 50 per cent, among the highest imposed by the US on any country in the world.
The additional 25 per cent duty will come into effect after 21 days or August 27.