MUMBAI: The Indian rupee is poised to begin the week on a weak note, pressed by the decline in Asian peers following U.S. President Donald Trump’s comments that higher tariffs could be reinstated by August if trade deals aren’t secured.
The one-month non-deliverable forward indicated an open in the 85.48-85.52 range, versus 85.3925 in the previous session.
Trump said the United States is nearing the finalisation of several trade deals and will notify other countries of increased tariff rates from Monday to July 9 that will be effective from August 1.
On India-US trade deal, the countries are likely to take final decision on mini trade deal within 48 hours, India’s CNBC-TV18 reports.
In April, Trump announced a 10% base tariff on most countries along with a higher “reciprocal” rate, which was suspended till this Wednesday to allow for negotiations to reach deals.
Trump added that any country aligning with the “anti-American policies” of BRICS would face an additional 10% tariff.
Asian equities dropped in tandem with U.S. stock futures, while regional currencies declined, with overall losses mostly modest.
The offshore Chinese yuan slipped to 7.17 to the U.S. dollar, and the Korean won, the Indonesian rupiah and the Thai baht were down between 0.2% and 0.3%.
The moves in the Asian currency space are “pretty manageable,” in light of what appears to be more confusion on the U.S. tariff front, a currency trader said.
The rupee may “fall a bit” considering Asia’s moves, he said, adding, “Still, it doesn’t mean much. It’s been stuck in a range, and this news doesn’t change that.”
The dollar index inched higher while U.S. Treasury yields did not react much. Oil prices dropped after OPEC+ surprised markets by hiking output more than expected in August, raising concerns about oversupply.
