Rupee rises 12 paise to close at 87.53 against U.S. dollar
Forex traders said the U.S.' imposition of a 25% tariff on Indian exports triggered risk-off sentiment and heightened concerns regarding further rupee depreciation.
On Wednesday, Mr. Trump announced the 25% tariff on India and an additional penalty for New Delhi's purchases from Russia.
While August 1 was the tariff implementation deadline, the new levies will come into effect from August 7.
At the interbank foreign exchange, the domestic unit opened at 87.60 against the greenback, touching an intra-day high of 87.20 against the American currency.
At the end of Friday's trading session, the local unit settled at 87.53 (provisional), up 12 paise over its previous closing price.
On Thursday, the rupee recovered 15 paise from an all-time low level to close at 87.65 against the U.S. dollar.
"Mixed to positive economic data from the U.S. supported the greenback. However, Rupee pared initial losses on softening crude oil prices and reports of intervention by the RBI at record low levels," said Anuj Choudhary – Research Analyst at Mirae Asset Sharekhan.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, rose by 0.26% to 100.23.
Brent oil prices fell 0.31% to $71.48 per barrel, as traders digested the impact of new, higher U.S. tariffs that may curtail economic activity and lower global fuel demand.
"We expect the rupee to remain weak. The domestic market remained weak, dented market sentiments on the back of the ongoing trade deal limbo. FII outflows may further pressurise the rupee. Traders may take cues from non-farm payrolls reports from the U.S. USD-INR spot price is expected to trade in a range of 87.15 to 88," Mr. Choudhary said.
In the domestic equity market, the 30-share BSE Sensex declined 585.67 points, or 0.72%, to close at 80,599.91, while the Nifty fell 203.00 points, or 0.82%, to settle at 24,565.35.
Foreign institutional investors (FIIs) offloaded equities worth ₹5,588.91 crore on a net basis on Thursday, according to exchange data.
Meanwhile, India's manufacturing sector growth strengthened in July to a 16-month high of 59.1, supported by faster increases in new orders and output amid favourable demand conditions, a monthly survey said on Friday.
The seasonally adjusted HSBC India Manufacturing Purchasing Managers' Index rose from 58.4 in June to 59.1 in July, signalling the strongest improvement in the health of the sector since March 2024.
On the domestic macroeconomic front, the centre's fiscal deficit stood at 17.9% of the full-year target at the end of June, according to data released by the Controller General of Accounts (CGA) on Thursday.
It was at 8.4% of the Budget Estimates (BE) of 2024-25 in the first three months of the previous financial year.
In absolute terms, the fiscal deficit, or gap between the government's expenditure and revenue, was ₹2,80,732 crore in the April-June period of the 2025-26 fiscal year.
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