Finance
As worries about more tariffs overshadowed the Federal Reserve Chair’s rate-cut signals, the Indian Rupee gave up its early gains on Monday and ended the day weaker.
According to Bloomberg, the local currency ended Monday’s trading session 7 paise down versus the US dollar at 87.60. However, the unit opened 14 paise higher. As of the now, the Rupee has lost 2.15 percent in the current fiscal year and 2.30 percent in 2025. It increased by almost 0.20 percent vs the dollar in August.
While the rupee opened with a minor gap-up, it quickly gave up gains as dollar strength resurfaced, according to Jateen Trivedi, VP Research Analyst – commodity and currency at LKP Securities. “Persistent FII outflows, with foreign investors remaining net sellers in the Indian market, continue to weigh on sentiment. Additionally, renewed concerns over the US tariff stance on India are further curbing rupee upside potential.”
Anil Kumar Bhansali, head of treasury and executive director of Finrex Treasury Advisors LLP, stated that while the Reserve Bank of India (RBI) is seen actively intervening to stem excessive devaluation, the downside was restrained by expectations of a Federal Reserve rate cut. The dollar-rupee pair, however, might rise if outflows quicken in response to the Trump administration’s additional 25 basis point trade tariffs, which went into effect on August 27, he said.
At the Jackson Hole conference in Wyoming on Friday, Fed Chair Jerome Powell hinted at the possibility of rate decreases. Powell warned that the policy position would be modified following the poor employment numbers, implying a changing balance of risks. He also emphasized the continued danger of rising inflation brought on by the tariffs imposed by President Donald Trump. According to Bloomberg, traders anticipate an 84% chance of a rate decrease at the FOMO’s September 16–17 meeting.
The dollar index, a measure of the greenback against a basket of six major currencies, was up 0.21 per cent at 97.92.
Following Ukraine’s attack on Russia’s nuclear reactor, which stoked fears that the Russian oil supply might be interrupted, commodity prices increased. As of 3:35 PM IST, the price of Brent crude was up 0.28 percent at 67.92 per barrel, while the price of WTI crude was up 0.35 percent at 63.88 per barrel.
Source: BS
