Mumbai (Economy India): The Indian rupee weakened by 11 paise to trade at 90.77 against the US dollar in early trade on Tuesday, reflecting cautious sentiment in the currency market despite the recently announced India–US interim trade framework.
At the interbank foreign exchange market, the rupee opened slightly stronger at 90.63 against the dollar but soon came under pressure and slipped to 90.77, marking a decline of 11 paise from its previous close. Market participants said the domestic currency remains vulnerable due to global uncertainties and sustained demand for the US dollar.
On Monday, the rupee had witnessed a volatile session and ended marginally lower, closing 1 paisa down at 90.66 against the greenback. Currency traders noted that while the trade framework between India and the US was seen as a long-term positive, it has failed to provide immediate support to the rupee.
According to forex dealers, investors are adopting a “wait-and-watch” approach, as global markets continue to grapple with concerns over interest rate trajectories, geopolitical tensions, and uneven global growth prospects. The US dollar index, which measures the greenback’s strength against a basket of major currencies, remained firm in early Asian trade, adding pressure on emerging market currencies, including the rupee.
Rising US Treasury yields and persistent foreign fund outflows from domestic equity markets have further weighed on the Indian currency. Foreign institutional investors (FIIs) have been cautious in recent sessions, driven by valuation concerns and shifting global risk appetite.
Meanwhile, crude oil prices, a key factor influencing the rupee, were trading with mild volatility. Although prices have eased from recent highs, uncertainty over supply disruptions and global demand continues to impact currency sentiment. India is a major importer of crude oil, and higher prices tend to weaken the rupee by widening the trade deficit.
Market experts believe the rupee may remain under pressure in the near term, with movements largely dictated by global cues, dollar strength, and capital flows. However, they added that strong macroeconomic fundamentals, stable inflation, and healthy foreign exchange reserves could help limit sharp downside risks.
Traders are now awaiting further cues from upcoming global economic data and central bank signals, particularly from the US Federal Reserve, which will play a crucial role in determining the rupee’s direction in the coming sessions.
(Economy India)
