Rupee inches lower to 87.28 vs US dollar

The Indian rupee opened 7 paise weaker at 87.28 against the US dollar on Wednesday (March 12, 2025) compared to its previous close of 87.21, as mixed global cues and dollar strength weighed on sentiment. 

The US dollar index stood at 103.5220, while crude oil prices on the MCX traded at Rs 5,823. The rupee’s movement remained largely influenced by global inflation trends, with the US inflation rate expected to ease to 2.9 per cent from 3.0 per cent, while India’s inflation is projected to decline to 4.0 per cent from 4.31 per cent, according to Jateen Trivedi, VP Research Analyst – Commodity and Currency, LKP Securities.  

“The expected trajectory of lower inflation in both the US and India suggests a mildly supportive environment for the rupee. The currency is likely to trade within a range of 86.85-87.45, with inflation data and global market trends playing a key role in further movement,” said Trivedi.

V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, stated that sustained FPI outflows from India have been the primary driver of the rupee's steady decline against the dollar.

"In CY 2025 up to March 7th FIIs sold equity worth Rs 137354 crores in the Indian stock market. Money has been moving to the US triggered by the Trump trade and recently China has been attracting lot of funds due to the cheap valuation of Chinese stocks. Concerns surrounding the uncertainty caused by Trump’s tariff policy also is impacting emerging market currencies like the INR," Vijayakumar added.

Dilip Parmar, Senior Research Analyst at HDFC Securities, noted that the USDINR pair is expected to find support at 86.87, while resistance is Jateenseen at 87.55.  

Also Read: Rupee settles 10 paise higher at 87.21 against US dollar

Meanwhile, US President Donald Trump defended his tariff policies in a meeting with top CEOs, as concerns over economic slowdown and inflation weighed on investor sentiment. The latest JOLTS data showed job openings in the US rising by 232,000 to 7.74 million in January, while December figures were revised lower.  

On Tuesday, the rupee had gained 10 paise to close at 87.21, supported by a weaker greenback and subdued crude prices. However, foreign institutional investor (FII) outflows and volatility in domestic equities limited the currency’s upside.  

Also Read: GIFT Nifty futures up 37 points at 22,555; suggest positive opening on D-Street

Equity markets open higher despite US tariff concerns  

Indian equity markets opened on a positive note on Wednesday, even as fresh US tariff measures stoked fears of a potential recession. The benchmark Sensex opened higher by 203.18 points, or 0.27 per cent, to 74,305.5, while the Nifty50 gained 52.8 points, or 0.23 per cent, to 22,550.7 at the opening bell.  

Broader markets outperformed the frontline indices, with the Nifty Smallcap 100 rising 0.3 per cent in early trade.