Indian rupee sticks to losing run as outflows, tariff worries sustain pressure
The rupee closed at 86.3675 against the U.S. dollar, down 0.1% on the day.
The rupee has fallen around 0.6% over its five-day losing streak, weighed by a modest rebound in the dollar index, foreign portfolio outflows, and concerns over the economic fallout from U.S. President Donald Trump's ongoing trade war.
Equity markets in Asia and Europe were mostly lower on Tuesday, while Wall Street futures were flat after the S&P 500 and Nasdaq hit record highs in the previous session.
Regional currencies were trading mixed and India's benchmark equity indexes, the BSE Sensex and Nifty 50 closed a tad lower.
While markets have shown a relatively muted reaction to the latest trade salvos from the White House in July, analysts said the complacency may start to fade as the deadline for trade deals draws closer.
Indian rupee weakens slightly, broad dollar softness cushions pressure
'Markets' defiant approach to tariff news will be tested in the coming days as the risk of no trade deals before the 1 August deadline rises,' ING said in a note.
The prospects of an interim trade deal between India and the United States before the deadline have dimmed, as talks remain deadlocked over tariff cuts on key agricultural and dairy products, Reuters reported earlier on Tuesday.
In the absence of a trade deal, Indian exports would be subject to a 26% tariff.
The European Union, meanwhile, is preparing possible countermeasures against the U.S. as prospects for an acceptable trade agreement fade, per EU diplomats.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Express Tribune
36 minutes ago
- Express Tribune
US, China to resume tariff talks in effort to extend truce
US and Chinese flags and a "tariffs" label are seen in this illustration created on April 10, 2025. Photo: Reuters Listen to article Senior US and Chinese negotiators meet in Stockholm on Monday to tackle longstanding economic disputes at the centre of the countries' trade war, aiming to extend a truce keeping sharply higher tariffs at bay. China is facing an August 12 deadline to reach a durable tariff agreement with President Donald Trump's administration, after Beijing and Washington reached a preliminary deal in June to end weeks of escalating tit-for-tat tariffs. Without an agreement, global supply chains could face renewed turmoil from duties exceeding 100%. The Stockholm talks, led by US Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng, take place a day after European Commission President Ursula von der Leyen meets Trump at his golf course in Scotland to try to clinch a deal that would likely see a 15% baseline tariff on most EU goods. Also Read: Israel announces daily pauses in Gaza fighting as aid airdrops begin Trade analysts on both sides of the Pacific say the discussions in the Swedish capital are unlikely to produce any breakthroughs but could prevent further escalation and help create conditions for Trump and Chinese President Xi Jinping to meet later this year. Previous US-China trade talks in Geneva and London in May and June focused on bringing US and Chinese retaliatory tariffs down from triple-digit levels and restoring the flow of rare earth minerals halted by China and Nvidia (NVDA.O), opens new tab H20 AI chips and other goods halted by the United States. So far, the talks have not delved into broader economic issues. They include US complaints that China's state-led, export-driven model is flooding world markets with cheap goods, and Beijing's complaints that US national security export controls on tech goods seek to stunt Chinese growth. "Stockholm will be the first meaningful round of US-China trade talks," said Bo Zhengyuan, Shanghai-based partner at China consultancy firm Plenum. Trump has been successful in pressuring some other trading partners, including Japan, Vietnam and the Philippines, into deals accepting higher US tariffs of 15% to 20%. He said there was a 50-50 chance that the US and the 27-member European Union could also reach a framework trade pact, adding that Brussels wanted to "make a deal very badly". Read: Six killed, scores injured in Indian temple stampede Two of Trump's top trade officials, Commerce Secretary Howard Lutnick and US Trade Representative Jamieson Greer, will attend the Scotland talks and then travel to Stockholm. Analysts say the US-China negotiations are far more complex and will require more time. China's grip on the global market for rare earth minerals and magnets, used in everything from military hardware to car windshield wiper motors, has proved to be an effective leverage point on US industries. Trump-Xi meeting? In the background of the talks is speculation about a possible meeting between Trump and Xi in late October. Trump has said he will decide soon whether to visit China in a landmark trip to address trade and security tensions. A new flare-up of tariffs and export controls would likely derail any plans for a meeting with Xi. "The Stockholm meeting is an opportunity to start laying the groundwork for a Trump visit to China," said Wendy Cutler, vice president at the Asia Society Policy Institute. Bessent has already said he wants to work out an extension of the August 12 deadline to prevent tariffs snapping back to 145% on the US side and 125% on the Chinese side. Still, China will likely request a reduction of multi-layered US tariffs totaling 55% on most goods and further easing of US high-tech export controls, analysts said. Beijing has argued that such purchases would help reduce the US trade deficit with China, which reached $295.5 billion in 2024. Also Read: Drone debris disrupts trains, suspends flights in Volgograd China is currently facing a 20% tariff related to the US fentanyl crisis, a 10% reciprocal tariff, and 25% duties on most industrial goods imposed during Trump's first term. Bessent has also said he would discuss with He the need for China to rebalance its economy away from exports toward domestic consumer demand. The shift would require China to put an end to a protracted property crisis and boost social safety nets to encourage household spending. Michael Froman, a former US trade representative during Barack Obama's administration, said such a shift has been a goal of US policymakers for two decades. "Can we effectively use tariffs to get China to fundamentally change their economic strategy? That remains to be seen," said Froman, now president of the Council on Foreign Relations think-tank.
Express Tribune
8 hours ago
- Express Tribune
Dar touts inflation dip, better global relations
Listen to article Deputy Prime Minister and Foreign Minister Ishaq Dar said Pakistan has emerged from diplomatic isolation and is witnessing economic recovery, highlighting a sharp drop in inflation and growing international engagement. Speaking to the Pakistani community at the Consulate General in New York on Saturday, Dar said, 'We have made considerable progress, especially in political and economic fields, in the past three years, despite heavy odds – we are indeed a resilient nation.' Dar, who returned earlier in the day from Washington, said his meeting with US Secretary of State Marco Rubio was held in a cordial atmosphere and covered key global and regional matters. 'The meeting went very well,' he said, expressing hope for stronger bilateral ties. Present at the event were Pakistan's Ambassador to the United States Rizwan Saeed Sheikh, Permanent Representative to the UN Ambassador Asim Iftikhar Ahmad, and Consul General Aamir Ahmed Atozai. Dar told the audience that Pakistan was no longer isolated and now enjoys support from many nations, evidenced by recent high-level meetings with officials from China, the US, and others. He pointed to the reduction of inflation from 40% to 2.4% as of January 2025 as proof of government effectiveness. The DPM/FM said investor confidence had returned following the successful conclusion of the IMF programme, a recovery acknowledged by international credit agencies. He reaffirmed the government's ambition to join the G20. Dar credited PML-N leader Nawaz Sharif for steering the federal and Punjab governments, calling him an able statesman. He also briefed the community on the Special Investment Facilitation Council (SIFC), which aims to ease investment in key sectors. He announced that work was under way to resume PIA flights to New York, following the restoration of routes to Europe and the UK. Appreciating the Pakistani-American community's role, Dar acknowledged their contributions to Pakistan and the US, praising their unity during past tensions with India. He recounted the shooting down of six Indian aircraft by the Pakistan Air Force and praised the leadership of Chief of Army Staff Field Marshal Syed Asim Munir. Dar noted Pakistan's presidency of the UN Security Council—secured with support from 182 countries—and the unanimous adoption of a Pakistan-sponsored resolution on peaceful settlement of disputes. He reaffirmed Pakistan's commitment to diplomacy, peaceful regional ties, and its outreach to Afghanistan for trade and rail connectivity, while expecting Afghan soil not to be used for terrorism. On Aafia Siddiqui's incarceration, he said efforts for her release were ongoing through diplomatic channels. Ambassador Sheikh also addressed the community, noting Pakistan's improved global image following the armed forces' role in national defence. He urged the diaspora to invest in Pakistan, saying a strong economy is vital for national security.
Business Recorder
11 hours ago
- Business Recorder
US business delegation to visit China, SCMP says
A high-level delegation from the US-China Business Council will visit China this week and is expected to meet senior Chinese officials, the South China Morning Post reported on Sunday, citing two sources familiar with the matter. US, China reach deal to ease export curbs Reuters could not immediately verify the report.
