Indian Rupee Faces Pressure

The Indian rupee experienced a decline, closing at 85.77 against the US dollar, influenced by month-end dollar demand from importers and a stronger greenback. This movement comes in the wake of US President Donald Trump's announcement of a 25% tariff on automotive imports, adding to the currency's volatility.

Market Dynamics and Analyst Insights

Forex dealers highlighted liquidity concerns and fears of reciprocal tariffs as additional pressures on the rupee. Despite these challenges, the domestic equity markets showed resilience, with the BSE Sensex and Nifty posting gains. Anuj Choudhary of Mirae Asset Sharekhan anticipates the rupee may continue to face downward pressure but could find support from strong domestic markets and foreign inflows.

Global Indicators

The dollar index slightly decreased, while Brent crude prices saw a minor drop. Meanwhile, foreign institutional investors demonstrated confidence in the Indian market, with significant net equity purchases.