Mumbai, Feb 27: The Indian rupee weakened by 2 paise to close at 87.21 per US dollar on Tuesday, weighed down by a sluggish domestic market and continued foreign fund outflows. The greenback gained strength globally following fresh tariff announcements from the United States, further pressuring the local currency.
At the interbank foreign exchange, the rupee opened at 87.26, touching an intraday high of 87.12 and a low of 87.41before settling at 87.21. This marks a minor depreciation compared to its previous close of 87.19 on Tuesday, when it had dropped sharply by 47 paise.
Key Market Factors Impacting Rupee
- US Tariffs Strengthen Dollar: The latest trade policy measures announced by the US have sent ripples across global markets, boosting the dollar index to 106.59, up 0.17%.
- Month-End Dollar Demand: Routine demand for the greenback at the end of the month further fueled its strength.
- FII Selling Pressure: Foreign Institutional Investors (FIIs) offloaded ₹3,529.10 crore worth of equities on Tuesday, exerting additional pressure on the rupee.
Market Outlook & Expert Analysis
Anuj Choudhary, Research Analyst at Mirae Asset Sharekhan, expects the rupee to trade with a negative bias amid domestic market weakness and FII outflows. He noted that a further rebound in the US dollar could add pressure, although RBI intervention and softer crude oil prices might provide some support at lower levels."Traders will be closely monitoring US GDP data and the upcoming core PCE price index, which could impact forex market movements. The USD-INR spot price is expected to range between 87 and 87.60," Choudhary added.
Global Markets & Commodity Trends
- Brent Crude rose 1.02%, trading at $73.27 per barrel in futures.
- Domestic Equity Markets: The BSE Sensex closed marginally lower by 10.31 points at 74,612.43, while the Nifty declined 2.50 points to 22,545.05.
US Tariff Developments & Global Impact
The global financial landscape remains volatile after US President Donald Trump reaffirmed tariff measures, announcing that duties on Canada and Mexico would take effect from April 2. Additionally, a potential 25% reciprocal tariff on European goods has heightened concerns over possible retaliatory moves from the European Union.However, the postponement of the 25% tariff on Canadian and Mexican goods, originally scheduled for March 4, has slightly limited the dollar’s gains.