Currency Market: Rupee slips 8 paise to close at 85.77 vs US dollar

The rupee weakened by 8 paise to settle at 85.77 (provisional) against the US dollar on Thursday, weighed down by month-end dollar demand from importers and the greenback’s rebound against major global currencies. 

The dollar gained strength after US President Donald Trump announced a 25 per cent tariff on automotive imports late Wednesday, set to be implemented from April 2. This move heightened concerns over trade tensions, putting additional pressure on the rupee.

Forex dealers noted that liquidity constraints, apprehensions over reciprocal tariff measures, and increased demand for the US dollar from importers contributed to the domestic currency’s weakness. However, strong domestic equities and sustained foreign fund inflows provided some support.  

Also Read: Currency Market News: Rupee down 24 paise to 85.93 vs US dollar

Rupee movement during session

At the interbank foreign exchange, the rupee opened at 85.90, briefly strengthening to 85.73 against the dollar. However, volatility persisted, with the currency touching an intraday low of 85.93 before settling at 85.77, marking an 8 paise decline from Wednesday’s close of 85.69.  

Anuj Choudhary, research analyst at Mirae Asset Sharekhan, stated that the rupee is likely to trade with a slight negative bias due to month-end dollar demand from importers and oil marketing companies (OMCs).  

"Elevated crude oil prices and a bounceback in the US dollar may also pressurise the rupee. However, strong domestic markets and FII inflows may support the rupee at lower levels. Traders may take cues from final GDP data from the US. USD-INR spot price is expected to trade in a range of 85.60 to 86.10," Choudhary added.

Jateen Trivedi, VP research analyst—Commodity and Currency at LKP Securities, noted that the rupee remained largely stable near 85.50 as market participants awaited US GDP numbers, which are anticipated to drop to 2.3 per cent from the previous 3.1 per cent.  

"The dollar index remained above 104.10 dollar, keeping some pressure on the rupee. However, FII flows have turned positive, providing support. Despite this, crude price firmness has contributed to slight rupee weakness in recent sessions. The rupee range is expected between 85.15-85.85, with upcoming US data releases and crude movement playing a key role in its direction," Trivedi explained. 

Global market indicators  

The dollar index, which measures the greenback’s strength against a basket of six major currencies, was down 0.11 per cent at 104.43. Meanwhile, Brent crude, the global oil benchmark, declined 0.46 per cent to 73.45 dollar per barrel in futures trade.  

Also Read: Final Trade: Sensex gains 318 pts, Nifty closes at 23,592 as markets recover from early losses 

Stock market performance  

Indian equity markets rebounded on Thursday despite opening in negative territory amid weak global cues. The Sensex gained 334 points, or 0.43 per cent, to close at 77,622, while the Nifty 50 climbed 0.51 per cent to settle at 23,606.  

The market recovery was led by financial stocks and broader indices, offsetting losses in the auto sector, which came under pressure due to the newly announced US tariffs on vehicle imports.  Foreign institutional investors (FIIs) continued their buying spree, recording net equity purchases worth Rs 2,240.55 crore on Wednesday, according to exchange data.

(With inputs from agenices)