
Drop in US Treasury yields helps Indian rupee
The Indian rupee saw a marginal increase, while dollar-rupee forward premiums rose amidst concerns over the economic impact of the U.S.-China trade war, which drove down U.S. Treasury yields and crude oil prices. Despite reports of a potential delay in a U.S.
Tired of too many ads?
Remove Ads
Tired of too many ads?
Remove Ads
The Indian rupee was marginally stronger on Tuesday and dollar-rupee forward premiums ticked up as concerns over the economic fallout of U.S. President Donald Trump's trade war drove U.S. Treasury yields, the greenback and crude oil prices lower.The rupee ticked up to 86.2650 per U.S. dollar by 11:10 a.m. IST, slightly higher than its close at 86.2925 in the previous session.The dollar index was steady at 97.9 in Asia trading after falling 0.6% on Monday, tracking a decline in U.S. Treasury yields that saw the 10-year yield touch a near two-week low of about 4.35%.Short-term U.S. Treasury yields declined as well, which helped boost far-tenor dollar-rupee forward premiums.The 1-year dollar rupee implied yield rose to an over two-week high of 2.03%, while a fall in rupee liquidity in the banking system helped lift very near-tenor dollar-rupee swap rates.Indian assets largely sidestepped a media report that a trade deal between India and the U.S. is unlikely before August 1 with equities and the rupee clinging to slight gains while the yield on the benchmark 10-year bond was little changed.Steep reciprocal levies on exports to the U.S. are slated to go into effect next month with India likely to face a 26% charge in the absence of a deal."The rupee's trajectory remains tilted toward further weakness, with both the 86.00 and 86.20 levels now breached. This opens the door for a move toward 86.50-86.80," said Amit Pabari , managing director at FX advisory firm CR Forex.In addition to uncertainty on global trade dynamics, muted foreign portfolio flows have also been a sore point for the rupee.Overseas investors have net sold about half a billion dollars of local stocks in July so far while year-to-date outflows stand at nearly $9.5 billion.
Hashtags

Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles


Hindustan Times
24 minutes ago
- Hindustan Times
UK FTA is a turning point in how India engages with West
The signing of the free trade agreement (FTA) between India and the UK last week was no ordinary moment — not just because 99% of Indian exports to the UK will now enter tariff-free, or because British luxury cars and Scotch whisky are about to get cheaper. The real story is India's evolving place in global trade — more assertive, more selective and no longer willing to play by someone else's rulebook. The immediate economic benefits are eye-catching. For British exporters, tariff cuts on whisky (down from 150% to 75% right away, and to 40% in a decade), high-end vehicles, cosmetics and dairy offer new access to India's swelling consumer base. For Indian exporters — particularly in textiles, jewellery, EVs, marine products and generics — the UK market is now wide open, with tariff advantages over rivals like China and Vietnam. The UK's access to Indian public procurement markets and its offer to exempt Indian professionals from social security payments sweeten the deal further. Also, Indian yoga teachers, chefs and tech workers will find short-term visas easier to secure— a meaningful breakthrough on the politically sensitive issue of mobility and immigration India's MSMEs are expected to be among the biggest winners. Industry analysts estimate a 30-40% rise in Indian exports to Britain in the next five years. That's not just numbers on paper — that's jobs on the ground, especially in states like Gujarat, Tamil Nadu and Maharashtra. But perhaps the most significant thing about this deal is what isn't in it — agriculture. India drew a red line, clearly flagging at the outset that it's non-negotiable, which the UK respected. Our government is fully aware of our responsibility to protect the rights of our farmers. Opening up Indian farming to global agribusiness is politically radioactive. The UK agreement avoids that minefield. This signals something larger: India is happy to do trade, but only on terms that don't destabilise our broader economic progress. This new pragmatism — open on industry, cautious on food — could now become the blueprint for other negotiations, particularly with the ongoing one with the US. Hours after the India-UK deal was inked, eyes turned to the US. Trade talks with the US have been ongoing for some months. On Thursday, India's ministry of external affairs confirmed that both sides are working on the 'first tranche' of a multi-sector Bilateral Trade Agreement (BTA). Behind the scenes, pressure is mounting. After reimposing 10% reciprocal tariffs on global exports in April 2025, the US specifically slapped a 26% tariff on Indian goods, though a pause was granted till August 1. That ticking clock now adds urgency to the ongoing BTA talks. Here's the sticking point: The US wants access to India's agriculture and digital markets. India, meanwhile, wants tariff rollbacks, supply chain integration and protection for its strategic sectors. The Union government is clear: India will negotiate hard and the US should not mistake flexibility for submission. The UK deal becomes a silent message to the US: We're open to trade but we won't be bullied. The UK FTA also shifts the geopolitical axis slightly. Post-Brexit, Britain badly needed a big trade deal. India, flush with economic confidence and global attention, was in no rush. That power asymmetry is visible in the final text of the agreement— cautious, layered, incremental. This is not a one-shot silver bullet. It's a living document, built to expand, revise tariffs and add new sectors over time if required. For India, the pact also sends signals elsewhere, to the EU, Japan and Asean. In July alone, the US concluded trade deals with Vietnam, Japan and Indonesia — all part of its Indo-Pacific economic strategy. India, however, is forging its own path. It's building a trade perimeter that keeps sovereignty intact while enabling access and investment. There is, of course, no escaping the historical undertones. Two centuries ago, Britain came to India in the name of trade and stayed to conquer and rule. Today, Britain is back, but on an even keel. That reversal is more than symbolic. Indian policymakers, once wary of the term free trade because of its colonial baggage, are now redefining it. The FTA is not about deference, it's about mutual interest. India is opening doors, but it's also setting terms. This is more than a trade agreement. It is a shift in posture. It is a turning point in how India engages with the West. Gone is the tentative, aid-seeking India of old. This is a country that brings its own terms to the table, and expects others to adapt. The British see this deal as a lifeline in a post-EU economy. India sees it as leverage, a card it can play while negotiating with bigger economies like the US and EU. Undoubtedly, this trade deal is historic. Not just for what it delivers, but for what it represents — the arrival of a more assertive, strategic, and self-confident India on the global trade stage. As for the Americans, they would be wise to study the UK deal not as a template to copy, but perhaps as a warning. Push too hard, especially on food and data, and India will simply say no. Syed Zafar Islam is a national spokesperson of the BJP and former member of Parliament. The views expressed are personal


Time of India
26 minutes ago
- Time of India
‘Probably will know in an hour…': Donald Trump and EU chief begin trade deal talks in Scotland; seen as make-or-break
Donald Trump trade deals (AI image) US-EU trade deal: US President Donald Trump has begun trade deal talks with European Union chief Ursula von der Leyen in Scotland. Ahead of the talks, Trump spoke of the likelihood of a trade deal saying, '. .probably will know in an hour.' Trump and Ursula von der Leyen are looking to resolve a prolonged transatlantic trade dispute as the deadline approaches. Earlier Trump indicated a 50 percent probability of reaching an agreement with the European Union, which faces a reciprocal tariff of 30% unless a trade agreement is secured by August 1, with US officials confirming on Sunday that "no extensions" would be granted. Von der Leyen's European Commission, representing EU member states, is actively pursuing an agreement to protect trade relations valued at $1.9 trillion annually in goods and services. An EU diplomatic source told AFP that a framework for agreement emerged following late-night discussions on Saturday, several crucial matters remained unresolved. The ultimate decision remains with Trump. A diplomatic source was quoted as saying that while a political agreement exists, it awaits Trump's approval, who is maintaining negotiations until the final moment. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like If you have a mouse, play this game for 1 minute Navy Quest Undo The suggested arrangement includes a standard 15% tariff on European Union exports to the US, matching Japan's agreement, with exemptions for crucial industries such as aircraft and spirits, excluding wine. EU member states must ratify any agreement. Their ambassadors, whilst in Greenland, received updates from the commission and planned subsequent meetings following potential agreement confirmation. The EU representative indicated that the 27 nations broadly supported the proposed arrangement, whilst maintaining their established negotiating positions. The summit between Trump and von der Leyen is taking place at Turnberry along Scotland's southwestern shoreline, at the president's golf establishment, where he spent considerable time playing over the weekend. Trump, aged 79, expressed on Friday his aspiration to achieve a significant agreement with the EU. "I think we have a good 50-50 chance," the president stated, noting approximately 20 unresolved matters. Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now


Time of India
34 minutes ago
- Time of India
Trump says US very close to a deal with China, 50-50 chance of having a deal with EU
US President Donald Trump today said that the United States is very close to a deal with China. During a press briefing with European Commission President Ursula von der Leyen , Trump also said that there is a 50-50 chance of having a US-EU trade deal but he said that the main sticking point is the fairness.