The Indian rupee gave up opening gains as it closed weaker by two paise against the US dollar at 86.59 on Tuesday.
The domestic currency opened on a positive note against the greenback, following a more than 1% decline in the US dollar index after President Donald Trump's inauguration speech featured fewer tariff-related announcements. The domestic currency strengthened by 28 paise to open at 86.29 against the dollar, compared to Monday's close of Rs 86.57, as per Bloomberg data.
The dollar index, which tracks the greenback against six major currencies, dropped by 0.58%, standing at 108.71, according to Bloomberg. Meanwhile, crude oil prices showed weak movement, with WTI crude February futures falling 1.58% to $76.65 a barrel, while the Brent crude March futures was down 0.75% at $79.55 per barrel
Exporters might continue to hold back, maintaining a stop loss around 86.25, as the rupee remains under pressure due to persistent demand for the dollar, according to Anil Bhansali, head of treasury at Finrex Treasury Advisors.
"European and Asian currencies were retreating after Trump did not impose any tariffs on China and all risk assets gained. RBI is expectantly doing buy-sell swaps of long tenure to ease liquidity situation as also park its dollar sales to the far term," Bhansali said.
Early signals from the new US administration indicate a more structured approach to tariffs and fiscal policy, according to Kunal Sodhani of Shinhan Bank’s forex and rates treasury. "Trump declares a national emergency on energy and immigration, aiming to reshape US policies."
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