Rupee rises 34 paise to 84.96 against dollar amid crude price drop, US tariff impact

The rupee’s rebound has been driven primarily by a decline in crude oil prices and the weakening of the US dollar in global markets. According to forex traders, the greenback lost ground due to growing concerns over inflationary pressures, triggered by tariffs and the looming threat of a potential recession in the United States.

Mumbai: Rupee appreciated 34 paise to 84.96 against the US dollar in early trade on Friday, as the greenback’s broad-based weakness following the impact of Trump’s tariffs offered relief to emerging market currencies, including the rupee.

The key catalysts for the rupee’s rebound include the fall in crude oil prices and the weakness of the American currency in the overseas market.

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Forex traders said the American currency weakened amid concerns surrounding inflationary pressures following the impact of tariffs and a potential recession in the United States.

Moreover, retaliatory tariffs from trading partners could trigger a global trade slowdown, adding to recessionary fears.

At the interbank foreign exchange, the rupee opened at 85.07 against the greenback, then gained ground and touched 84.96, up 34 paise from its previous close.

On Thursday, the rupee settled at 85.30, higher by 22 paise against the US dollar as the greenback weakened against its major peers after President Donald Trump unleashed reciprocal tariffs on about 60 countries.

“The latest round of reciprocal tariffs was expected to boost US revenue, but the unintended consequences may be more severe. As higher import costs will ultimately burden consumers, potentially slowing economic growth,” CR Forex Advisors MD Amit Pabari said.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.42 per cent lower at 101.64.

Brent crude, the global oil benchmark, fell 0.84 per cent to USD 69.55 per barrel in futures trade.

“Among emerging Asian economies, India has emerged relatively unscathed in the tariff battle, facing a softer levy compared to rivals like China, Vietnam, and Thailand.

“While major export-driven economies struggle with steeper US duties, India’s effective rate remains at 27 per cent, among the lowest after the Philippines (17 per cent). This strengthens India’s competitive positioning and provides relative resilience to its currency,” Pabari added.

In the domestic equity market, the 30-share BSE Sensex fell 594.05 points, or 0.78 per cent, to 75,701.31, while the Nifty declined 239.85 points, or 1.03 per cent, to 23,010.25 points.

Foreign institutional investors (FIIs) offloaded equities worth Rs 2,806.00 crore on a net basis on Thursday, according to exchange data.