Indian rupee likely to open slightly higher, tracking Asia; Trump tariff impact muted
The 1-month non-deliverable forward indicated the rupee will open at 85.60-85.62 compared with 85.6725 in the previous session.
The rupee has fluctuated between 85.30 and just below 86 over the past week, testing both sides of its recent range.
In recent sessions, the rupee has been 'choppy within a well-defined range,' a currency trader at a private bank said.
'The consensus trade right now—both among corporates and interbank—is to buy USD/INR near 85.20–85.40 and sell near 85.90–86.10,' the trader said.
'It makes sense when you consider that there have been no major trigger points.'
Trump's tariffs
Investors largely shrugged off U.S. President Donald Trump's latest tariff salvo. Having already announced a 50% tariff on copper imports, Trump said the levies would take effect from August 1.
Further, he threatened a punitive 50% tariff on Brazil's exports to the United States, while issuing tariff notices to seven smaller trading partners.
Asian currencies and shares rose, indicating waning market sensitivity to Trump's tariff moves.
The dollar index inched lower.
Meanwhile, minutes of the Federal Reserve's June meeting showed narrow support for rate cut later this month.
Most participants at the Fed's meeting did anticipate rate cuts would be appropriate later this year, with any price shock from tariffs expected to be 'temporary or modest'.
MUFG Bank noted that, looking ahead, the market's attention may shift toward the Fed's policy path, which will be key to shaping the dollar's trajectory.
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