The Indian rupee weakened at open on Tuesday as Trump threatens to penalise India for continuing to buy Russian crude.
The local currency opened 19 paise weaker at 87.85 against US Dollar on Tuesday compared to its closing at 87.66 against a dollar on Monday, resuming volatility after the currency showed signs of recovery at the start of trading session.
Range for the day is expected to be between 87.50 and 88.25, said Anil Kumar Bhansali, Head of Treasury and Executive Director, Finrex Treasury Advisors LLP.
Indian rupee was seen under pressure and may likely continue to remain under pressure during this week after Trump said he may announce higher tariffs for India for continuing to buy Russian oil, Bhansali added.
"There has also been persistent pressure from FPIs after Trump announced 25% tariffs on all Indian exports despite the trade talks continuing. The rupee closed yesterday at 87.6550 but is slated to open at its lowest at 88 this morning after Trump's latest salvos targeting just India," he said.
He also advised exporters to hedge their exports and importers to wait for hedging and buy for cash at the day's lowest level. "How RBI looks at the new lows is to be seen in today's trade," he further highlighted.
Brent oil prices fell to their lowest levels in a week on Tuesday after OPEC+ agreed to hike another large output increase in September adding to over supply concerns after US data showed lacklusture fuel demand from the top fuel consuming bation.
"Brent fell to $ 68.69 per barrel as the latest accelerated output aimed at capturing market share was in line with market expectations and marks a full reversal of the groups largest tranche of output cuts amounting to about 2.5 million bps or about 2.4% of global demand," Bhansali noted.
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