The Indian rupee (INR) is currently navigating a complex landscape influenced by geopolitical tensions and economic concerns. Following the announcement of a 26% reciprocal tariff on goods from Taiwan, broad apprehensions have arisen regarding U.S. trade policies under President Trump. As a result, the dollar has experienced a dip due to growing concerns over U.S. economic growth.
Analysts report that the risks for the rupee remain "broadly balanced" at its current level, suggesting a potential for stability amidst turbulence. However, the rupee has faced pressure due to surging energy prices, with fears that rising oil costs may lead to increased inflation and subsequent interest rate hikes in India, a country that heavily relies on oil imports. This scenario has contributed to a steady weakening of the rupee against the U.S. dollar.
Recent data shows that INR to USD is trading at 7-day lows near 0.011642, slightly below its 3-month average, encapsulating a stable range of 0.011531 to 0.011873. This trend reflects a broader phenomenon where investors are shedding Asian currencies, including the INR, as the dollar gains strength against major peers.
The rupee's position against the euro (EUR) and the pound (GBP) also paints a picture of relative weakness. The INR to EUR stands at 0.009916, approximately 3.1% below its 3-month average, trading within a stable range of 0.009895 to 0.010617. Similarly, the INR to GBP is recorded at 0.008543, 1.9% lower than its average, with a stable range from 0.008496 to 0.009063.
On a slightly more positive note, the INR to JPY trades at 1.6988, just 0.7% above its 3-month average, indicating some resilience within that currency pair. The range here has been more stable, fluctuating from 1.6541 to 1.7476.
The combination of external tariff pressures and rising oil prices indicates a phase of heightened uncertainty for the rupee. Market analysts emphasize the need for vigilance as the currency reacts not only to domestic economic factors but also to unpredictable geopolitical developments and international trade policies.