The Indian rupee gained 19 paise to close at 87.00 against the US dollar on Wednesday due to a rebound in domestic stocks, a weakened American currency, and a drop in crude oil prices. Forex traders attribute the dollar’s decline to US President Donald Trump’s tariff escalation, which has triggered a ripple effect in global markets.
Despite experiencing high volatility throughout the day, the rupee opened at 87.18, reached an intraday high of 86.93, and a low of 87.20 against the greenback before settling at 87.00. The dollar index, which measures the dollar’s performance against six major currencies, fell 0.79% to 104.91 amidst trade tariff uncertainties.
Brent crude, the global benchmark for oil, also fell by 0.75% to $70.51 per barrel in futures trade. Analysts expect the rupee to trade positively due to the weakening dollar and lower oil prices, with any rise in domestic markets further supporting the currency. However, FII outflows and trade tariff uncertainty may hinder significant gains.
In the equity market, the BSE Sensex rose by 740.30 points to 73,730.23, while the Nifty gained 254.65 points to 22,337.30. Foreign institutional investors (FIIs) sold equities worth ₹3,405.82 crore on a net basis on Tuesday.
On the macroeconomic front, India’s services sector showed significant growth in February, with the HSBC India Services PMI Business Activity Index rising from 56.5 to 59.0 in the same month. Meanwhile, Trump criticized India and other countries for imposing high tariffs, labeling them as unfair, and announced reciprocal tariffs starting on April 2.
The US has already imposed additional tariffs on imports from Canada, Mexico, and China, prompting retaliatory actions from these countries. Canada plans to impose 25% tariffs on $30 billion worth of US goods starting March 4, while Mexico and China have also announced retaliatory measures on American products.
