Rupee Opens At Over Four-Month Low Against US Dollar 

The Indian rupee opened 18 paise weaker at 87 against the US dollar on Wednesday, marking its lowest level since March 13. The currency had closed at 86.82 on Tuesday, and traders expect it to trade in a range of 86.80 to 87.25 through the day.

“Trump said that India faces tariffs to the extent of 20-25%, which is much more than India and markets were anticipating, thus taking the rupee beyond 87 levels after a weak close at 86.8150 yesterday. The opening will be lower at 87.09 unless RBI comes and protects the rupee in the NDF market. Yesterday RBI was present at 86.90 as it rebounded thrice from that position,” said Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP.

"Rupee move is surprising to traders. The Dollar index weakening and other Asian currencies relatively stable. The importers did not expect 87 mark to be breached and are sitting out of the market because of sudden pressure on rupee," traders told NDTV Profit.

Trade deal uncertainties are leading to FPI outflows and stop losses were breached last night in the overnight currency market, they said. Traders watching for positive news on trade deal.

“Trump had earlier said that talks with India were progressing well, and it comes days before the August 1 deadline for the trade tariffs to take effect. The last resistance at 86.90 has since been broken, and with RBI allowing the rupee to weaken as FPIs continue selling the Indian stock markets and withdraw dollars to put money into developed markets, which are all generally at their highest while India faces the tariff's issues taking the markets down,” Bhansali said.

US President Donald Trump said on Tuesday that the rate of tariff to be levied against Indian imports had not been finalised yet.

The country may pay tariffs in the range of 20% to 25%, Trump told reporters aboard Air Force One. This was in response to a Reuters report on US tariffs amid extended US trade talks with India.

The report, however, said that this would be a temporary measure considering the trade talks between both the countries. The report also added that a deal will soon be worked out.

According to the report, India and the US are likely to finalise a comprehensive bilateral agreement by September or October.

Oil held the biggest gain in six weeks after US President Donald Trump reiterated he may impose additional economic penalties on Russia unless a truce is reached with Ukraine.

Brent was above $72 a barrel after closing 3.5% higher in the previous session, while West Texas Intermediate traded near $69. Trump warned of “tariffs and stuff” if a ceasefire isn’t agreed on in 10 days and said he wasn’t concerned about the impact on the market, suggesting the US could ramp up production, according to Bloomberg.