Rupee Weakens Against US Dollar After Trump Launches Tariff War

The Indian rupee weakened 24 paise against the US dollar on Thursday after US President Donald Trump triggered a tariff war that shook markets worldwide. The local currency opened at 85.75 against the greenback, its biggest opening drop since March 10.

In the near-term, the rupee will find strong support around 85.50-85.60, with a potential rebound towards 86.00-86.20 levels, according to Amit Pabari, managing director at CR Forex Advisors.

"However, in the long run, with US economic data showing signs of weakening and trade tariffs weighing on economic growth, the Dollar Index is expected to decline toward the 100 level, pushing the USD/INR pair towards 84.80-85.00," he said.

Trump will impose a 10% baseline tariff on all imports to the US and higher duties on some of the country's biggest trading partners. The tariffs will take effect on April 9. Indian goods will see a 26% tariff.

The dollar weakened against major currencies over fears the US will fall into recession if Trump's tariffs hit growth. Higher import costs could trickle down to US consumers, pushing up retail prices. The dollar index fell 0.76% to 103.02.

Investors flocked to the safety of the Japanese yen, with the currency appreciating 1.3% against the dollar. The Swiss Franc, another traditional safe haven, gained 0.7%. The euro and the British pound also rose by 0.5%.

Crude oil prices dipped, with the international benchmark Brent losing over 2% to trade at $73.34 per barrel.