The Indian rupee closed stronger against the US dollar after trading largely flat on Tuesday amid increasing global trade tensions and continued exiting by foreign institutional investors.
The domestic currency strengthened nine paise to close at 87.27 against the greenback, according to Bloomberg data. It had closed at 87.36 against the dollar on Monday.
US President Donald Trump said he would go ahead with new tariffs on Canada and Mexico from Tuesday, while hiking the tariff on China to 20%.
Crude oil prices traded near the lowest in almost three months as OPEC+ signalled plans to revive halted production. The Brent crude was down 1.37% at $70.64 a barrel as of 3:30 p.m., and the West Texas Intermediate was down 1.16% at $67.58.
Despite these favourable global factors, the rupee remains under pressure due to persistent FII selling and a prevailing liquidity deficit, according to Amit Pabari, managing director of CR Forex Advisors. "With 87.20 acting as a strong support, while 87.80 will act as a strong resistance."
With the NSE Nifty 50 falling on a daily basis as the FPIs continue to remain sellers, the rupee is getting sold off with the dollar amid demand on account of risk aversion, according to Anil Bhansali, executive director of Finrex Treasury Advisors LLP.
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