The rupee opened weaker against the greenback on Wednesday as the dollar index rebounded in Asia session after initial remark from the US that it would double tariffs on steel and aluminum import from the Canada. However, US later clarified that it won't double the tariffs.
Contradictory statements from the US regarding tariffs increased uncertainty in the market which compelled traders to flock to safe-haven currency.
The rupee opened 6 paise lower at 87.27 against US Dollar.
The rupee had settled 12 paise higher at 87.21 against the dollar Tuesday, as the dollar index fell to the lowest level in six months.
The dollar index rose as much as 0.15% to 103.58 so far today.
Most traders remained on the sidelines before the US inflation data. According to Bloomberg survey, US core CPI is expected to come at 0.3% on the month in February and 3.2% on the year.
"Markets price in 82 basis points of Fed rate cuts, increasing July easing expectations. Eyes on US CPI. For USDINR, 86.90 acts as resistance while 87.45 a support," said Kunal Sodhani, vice president, global trading centre, Shinhan Bank.
Crude oil prices extended gains to second session as US and the Energy Information Administration slashed production outlook for both, calendar year 2025 and 2026, on concerns over reduced flow from Iran and Venezuela, according to Bloomberg.
American Petroleum Institute data showed US crude oil inventories rose, while a big draw was noticed at Cushing, Oklahoma, Bloomberg reported.
Crude oil was trading 0.60% higher at $69.98 a barrel as of 9:00 a.m.
Some traders said that the Reserve Bank of India may step in to sell the US unit to arrest any sharp decline in the rupee.
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