MUMBAI: The Indian rupee is poised to open lower on Wednesday, weighed down by renewed worries over US tariffs and increased odds that the Reserve Bank of India would cut interest rates next week.
The 1-month non-deliverable forward indicated that the rupee will open at 86.56-86.58 to the US dollar, compared with 86.5225 in the previous session.
The dollar index inched up to near 108 in the Asia trading hours, after US President Donald Trump’s comments brought back the focus on tariffs.
Trump’s latest tariff threats came a day after the US and Colombia pulled back from the brink of a trade war.
The offshore Chinese yuan dipped to 7.2740 to the US dollar.
The rupee had managed to strengthen past 86.20 on Friday.
The relief rally for the rupee “was expectedly cut short”, a currency trader at a bank said.
“You can point to Trump’s comments or the RBI rate cut. However, the main point here is that it (the rupee) is in a dogged downtrend.”
Indian rupee logs worst day in nearly 2 weeks
The RBI on Monday announced a host of measures to inject liquidity into the banking system, including dollar/rupee swaps, which analysts said may set it up for a rate cut next week.
A rate cut by the RBI will be an added headwind for the rupee that is already dealing with equity outflows and uncertainties on the US policy front, traders said.
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