Rupee ends higher boosted by fragile dollar, likely portfolio inflows
MUMBAI, June 2 (Reuters) - The Indian rupee strengthened on Monday, supported by weakness in the U.S. dollar and modest dollar inflows that helped the local currency begin the week on a positive note.
The rupee closed at 85.3825 against the U.S. dollar, up 0.23% on the day.
Inflows related to the rejig of a global equity index helped the rupee move higher in early trading while broad-based dollar weakness was an added tailwind, traders said.
The dollar index fell below the 99 level amid concerns of a re-escalation in global trade tensions after U.S. President Donald Trump accused China of violating an agreement with the U.S. to mutually roll back tariffs.
Trump has also pledged to double tariffs on imported steel and aluminium starting Wednesday.
India estimates a "minor impact" from U.S. President Donald Trump's plan to increase tariffs on steel and aluminium products, per the country's federal steel minister.
"A shift to a more confrontational stance on trade between the US and China, plus a focus on a potential US 'revenge tax' on foreign investors, are weighing on the dollar," ING Bank said in a note.
Worries about the trade tensions also weighed on Asian stocks on Monday. Indian equities dipped marginally.
Meanwhile, Wall Street analysts have cautioned that a tax targeting foreign investors in the U.S. budget bill progressing through the country's legislature could end up weighing on demand for U.S. Treasuries and the dollar.
Domestically, the focus this week lies on the Reserve Bank of India's upcoming monetary policy decision due on June 6. The central bank is widely expected to deliver its third 25-basis-point rate cut.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Guardian
22 minutes ago
- The Guardian
Trump is strongarming companies elsewhere into cutting DEI. Those that cave in now will regret it later
Organising a women's networking event in the US has become an act of defiance. Companies with equality-driven agendas risk losing government contracts. Some are receiving McCarthy-like letters asking them to confirm that they have no diversity policies. Activities designed to support women, including healthcare research, are being threatened, and companies are backtracking on former commitments. Women's networking events, the gathering of diversity data and targeted training are being questioned. And some companies are requesting that charities focused on women and girls consider changes to their programmes in order to navigate the current climate. The one I founded, Inspiring Girls, has already been asked to 'include men as role models'. This anti-diversity wave isn't just a social backlash to the many excesses of wokeness – it is politically orchestrated and driven. It crystallised in 2021, when the senator Josh Hawley devoted his entire keynote speech at the second National Conservatism Conference to 'reclaiming masculinity', calling for boys (not girls) to be taught competitiveness, strength, honesty and courage – as if those were only male values. Since then, the movement has reached the highest offices of power: the White House is its headquarters and its commander-in-chief is Trump's deputy chief of staff, Stephen Miller, who promised last year to tackle 'anti-white racism' if Trump won a second term. The anti-diversity brigade has no shortage of money or allies: several 'tech bros' (whether out of conviction or FOMO) have joined in – as have tech venture capitalists and other Maga financiers. These are men who operate in fields dominated almost exclusively by other men and who wield enormous wealth and influence, yet they often cast themselves as victims. They hide their anti-diversity stance under the disguise of meritocracy. On the progressive side, there is a movement claiming that it is actually boys – particularly white working-class ones – rather than girls who are 'in crisis'. It is led by the American Institute for Boys and Men, which last week received a $20m grant from Melinda French Gates. They argue that boys lag behind girls in education and employment. It is true, of course, that many of the manufacturing jobs that many young men used to rely on are vanishing due to automation and tech (ironically, for the benefit of mostly male tech moguls). Unfortunately, however, this well-meaning movement is fuelling the anti-diversity brigade's narrative – because they can now claim that even progressives admit it is white men who are suffering. The Trump administration has not yet imposed specific obligations on businesses to withdraw diversity programmes beyond companies who have contracts with the government – including, now, some companies across the EU, but many are taking spontaneous actions. Some companies are doing so because their diversity policies were just for show, while others are simply acting out of fear. The trend is clear: many are eliminating references to diversity and equality from their websites and in their reporting; others are reneging from aspirational targets, stopping data-gathering on recruitment and promotions, and dismantling training programmes. Some of the companies that are backtracking have headquarters in the UK or Europe. And many of the US tech companies and funds that are leading the diversity backlash have subsidiaries and offices on this side of the Atlantic. Their actions are in straightforward conflict with the letter and the spirit of British and EU legislation on equality, such as EU corporate sustainability reporting rules or equal opportunities and equal pay directives. And yet the equality ministries in the British and other European governments – and in the European Commission – have remained largely silent. Most equality ministries and agencies are led by herbivorous politicians and officials who favour performative programmes over meaningful action. Confronting Trump is far too scary for them, which is why they have not set the limits of what companies can and cannot do, whether specifically or in general guidelines. Over time, it is possible the anti-diversity movement will yield some positives, as it could drive companies who continue to believe in diversity towards more meaningful, effective and data-based policies. Besides, in a litigation-led country such as the US, it is only a matter of time before the courts impose some limits on government-led anti-diversity intimidation. When they do, the backlash against companies that have acted spinelessly will have its own consequences. But the UK and the rest of Europe cannot be passive spectators waiting for the pendulum to swing again. Our equality authorities should counteract Trump's raid on diversity by providing clear official guidance to companies on what they can and cannot do – it is their legal and moral duty to do so. America First should not mean America Everywhere when it comes to the fundamental principles of diversity, equality and inclusion. Miriam González Durántez is an international trade lawyer and the founder and chair of Inspiring Girls
The Independent
25 minutes ago
- The Independent
White House staff were ‘caught off guard' by Elon Musk's broadside against Trump's bill, report says
President Donald Trump 's White House advisers were 'caught off guard' by Elon Musk 's astonishing attack on his 'big, beautiful bill' this week while Trump himself is said to be 'losing patience' with his billionaire ally, according to a report. Just days after Musk's 130-day tenure as a special government employee came to an end, the world's richest man began lashing out at Trump's signature tax and spending package, calling it a 'disgusting abomination' in an X post on Tuesday. A senior White House official now tells The Wall Street Journal that the president is not happy about Musk's intervention and is 'confused' by the billionaire's stance, given that they have spent the past four months working closely together. Asked whether it had hurt the relationship between the two men, the Journal 's sources indicated it was 'too soon to tell' but noted that, while Trump can be forgiving, he does not easily forget slights. Musk's bond with Trump certainly appears to be fraying, with the Big Tech boss cutting an increasingly beleaguered figure and reportedly annoyed by the bill's inclusion of a cut to an electric vehicle tax credit that benefits his Tesla customers and by Trump's recent decision to scrap his friend Jared Isaacman 's nomination to lead Nasa. The Tesla CEO last intervened over a Republican spending bill six months ago, firing out a string of tweets that forced House Speaker Mike Johnson into hasty rewrites just hours before Congress broke up for the Christmas recess. Musk's tweet on Tuesday sent shockwaves across the corridors of power in DC. 'I'm sorry, but I just can't stand it anymore. This massive, outrageous, pork-filled Congressional spending bill is a disgusting abomination,' Musk wrote. 'Shame on those who voted for it: you know you did wrong. You know it,' Musk wrote. He followed that up on Wednesday with a fresh appeal to 'KILL the BILL', imploring his millions of followers to contact their representatives and senators to remind them that 'bankrupting America is NOT ok!' Musk's opposition has garnered the support of conservative fiscal hawks like Kentucky Senator Rand Paul, who share his concern that the bill could add at least $2.4 trillion to America's national debt over the next decade, with some estimates placing the total closer to $5 trillion. Invited to respond on Tuesday, White House Press Secretary Karoline Leavitt said: 'The president already knows where Elon Musk stood on this bill; it doesn't change the president's opinion. This is one big beautiful bill, and he's sticking to it.' While that has not yet happened this time, Speaker Johnson has expressed frustration. 'We had a great, very friendly, very fruitful conversation together,' Johnson said of Musk at his weekly press conference on Wednesday. 'Twenty-four hours later, he does a 180 and he comes out against the bill. And it surprised me, frankly.' Johnson argued that Musk is 'flat wrong' in his objections and said that while he himself was 'not upset,' Trump was 'not delighted that Elon did a 180,' a statement that might well be interpreted as a warning. One person who was delighted with Musk was Kentucky Rep. Thomas Massie, one of just two House Republicans who voted against the bill in the lower chamber last month. 'I figured he would eventually get there,' Massie told the Journal. 'You don't land rockets backwards or get cars to drive themselves by ignoring the people who are lying to you.'
South Wales Guardian
38 minutes ago
- South Wales Guardian
Nato set to approve new military purchases as part of a defence spending hike
The 'capability targets' lay out goals for each of the 32 nations to purchase priority equipment such as air defence systems, long-range missiles, artillery, ammunition, drones and 'strategic enablers' such as air-to-air refuelling, heavy air transport and logistics. Each nation's plan is classified, so details are scarce. 'Today we decide on the capability targets. From there, we will assess the gaps we have, not only to be able to defend ourselves today, but also three, five, seven years from now,' Nato Secretary-General Mark Rutte said. 'All these investments have to be financed,' he told reporters before chairing the meeting at Nato's Brussels headquarters. US President Donald Trump and his Nato counterparts will meet on June 24-25 to agree to new defence investment goals. US defence secretary Pete Hegseth said that 'to be an alliance, you've got to be more than flags. You got to be more than conferences. You need to keep combat ready capabilities'. Spurred on by their own security concerns, European allies and Canada have already been ramping up military spending, including arms and ammunition purchases, since Russia launched a full-scale invasion of Ukraine in 2022. At the same time, some allies balk at US demands to invest 5% of their gross domestic product in defence – 3.5% on core military spending and 1.5% on the roads, bridges, airfields and sea ports needed to deploy armies more quickly – when they have already struggled to grow their budgets to 2% of GDP. The new targets are assigned by Nato based on a blueprint agreed upon in 2023 – the military organisation's biggest planning shake-up since the Cold War — to defend its territory from an attack by Russia or another major adversary. Under those plans, Nato would aim to have up to 300,000 troops ready to move to its eastern flank within 30 days, although experts suggest the allies would struggle to muster those kinds of numbers. The member countries are assigned roles in defending Nato territory across three major zones – the high north and Atlantic area, a zone north of the Alps, and another in southern Europe. Nato planners believe that the targets must be met within five to 10 years, given the speed at which Russia is building its armed forces now, and which would accelerate were any peace agreement reached to end its war on Ukraine. Some fear Russia might be ready to strike at a Nato country even sooner, especially if Western sanctions are eased and Europe has not prepared. 'Are we going to gather here again and say 'OK, we failed a bit', and then maybe we start learning Russian?' Lithuanian Defence Minister Dovile Sakaliene said. Swedish Defence Minister Pal Jonson also warned that while Russia is bogged down in Ukraine right now, things could quickly change. 'We also know after an armistice or a peace agreement, of course, Russia is going to allocate more forces closer to our vicinity. Therefore, it's extremely important that the alliance use these couple of years now when Russia is still limited by its force posture in and around Ukraine,' Mr Jonson said. If the targets are respected, the member countries will need to spend at least 3% of GDP on defence. Dutch Defense Minister Ruben Brekelmans said his country calculates in the medium term that 'we should spend 3.5% at least on defence, which in the Netherlands means an additional 16 to 19 billion euro (£13-16 billion) addition to our current budget.' The Netherlands is likely to buy more tanks, infantry fighting vehicles and long-range missile systems, including US-made Patriots that can target aircraft, cruise missiles and shorter-range ballistic missiles.
