INR vs USD: Indian Rupee appreciated by 15 paise to reach 87.73 against the US dollar in early trading on Wednesday, August 6, supported by a softer dollar.
On Tuesday, rupee slipped back to its record low and closed 22 paise weaker at 87.88 against the US dollar on August 5, as investor sentiment turned risk-averse following renewed tariff threats from US President Donald Trump in response to India’s ongoing imports of Russian oil.
According to forex traders, gains in the domestic currency were limited due to an increase in global Brent crude prices and continued outflows from foreign institutional investors (FIIs). They added that markets remained cautious, awaiting clarity on the outcome of the US tariffs.
“ Indian Rupee opened weak, briefly breaching the 88 per Dollar mark as US President Donald Trump threatened additional tariffs on India amid oil imports from Russia. Weak domestic markets too weighed on the rupee. However, Rupee pared initial losses on supposed intervention by the RBI. A soft US Dollar and overnight decline in crude oil prices also cushioned the downside,” said Anuj Choudhary, Research Analyst, Commodities Research| Mirae Asset Sharekhan.
Indian Rupee likely to slide further amid Trump’s tariffs
Choudhary further said that the Indian currency to likely to slide as India-US trade deal uncertainty continue to dent domestic market sentiments.
“ Weak tone in the domestic equities and FII outflows may further pressurise the Rupee. Market expect a rate cut by the central bank. However, overall weakness in the US Dollar amid rising odds of a rate cut by the Fed in September may support the Rupee at lower levels. Traders may take cues from ISM services PMI data from the US. USDINR spot price is expected to trade in a range of ₹87.50 to ₹88.20,” he added.
Meanwhile, Jateen Trivedi, VP Research Analyst – Commodity and Currency, LKP Securities, believes that the Indian Rupee is likely to remain volatile and remain under pressure.
“ Rupee traded weak at 87.80 as panic gripped markets following a late-evening post by the US President hinting at higher tariffs on India. Additionally, expectations that the US may pressure India to reduce Russian oil imports sparked fears of a higher import bill, pushing the rupee briefly below the 88.00 mark overnight. Some recovery was seen after the Ministry of External Affairs clarified India’s stance on crude purchases. However, the ongoing friction between the US and India on trade and energy is likely to keep the rupee volatile and under pressure. The rupee is expected to trade in the 87.40–88.25 range,” Trivedi said.
Is it an opportunity to invest in IT stocks?
Anuj Gupta, Director, Ya Wealth Research & Advisory recommended to invest in Indian IT stocks amid weak Rupee.
“ This is a good opportunity to invest in export sector particular like IT, Textile, Pharma & Gem& jewellery . However trump is expecting to impose more aggressive tariffs, but due to weakness in rupee may curb this impact on the exports. The value of export from India to Us is approx $86.5 billion, which can be shrinked due to tariff, but weakness in rupee may curb this down fall value of the export,” Gupta said.
Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions.
