Rupee Closes Stronger Against The US Dollar

Rupee closed three paise stronger against US Dollar at 85.65. It closed at 85.68 against the greenback on Wednesday. The local currency settled higher after US President Donald Trump escalated his tariff campaign by posting new letters on his social media platform, Truth Social.

He targeted six additional countries—Algeria, Iraq, Libya, Brunei, Moldova, and the Philippines—with fresh import duties ranging from 20% to 30%. Anil Kumar Bhansali, head of treasury and executive director of Finrex Treasury Advisors LLP, expects the Rupee to trade in the range of 85.50 to 86.00.

"Rupee rose to 85.6725 yesterday despite a fall in stock markets, with FPI being buyers of equity and sellers of dollars. FPIs may continue to be buyers of equity and accordingly sellers of dollars," he said.

"Market sentiment is getting battered by renewed tariff threats from the Trump administration. Fed Minutes solidify expectations for a September rate cut amid concerns of rising inflation from tariffs," according to Kunal Sodhani from FX Hub.

Brent oil fell to $70.08 per barrel as the latest tariff announcements by President Donald Trump were perceived by the investors as a threat to Global Economic Growth and accordingly demand for the oil.

Policymakers are worried about inflationary pressures from these tariffs with only a couple of officials from Fed feeling that interest rates could be reduced as per the minutes of June 17-18 meeting. Higher interest rates make borrowing expensive and reduce demand for oil.