The USD/INR pair strengthened, driven by renewed market uncertainty following Donald Trump’s tariff threats. The comments, aimed at reshaping global trade agreements, have triggered concerns over India’s export-dependent sectors, leading to a depreciation in the rupee.
Traders reacted swiftly to the tariff warning, with the dollar gaining ground against emerging-market currencies. The Indian rupee has come under pressure as investors brace for potential disruptions to trade flows and capital inflows. Analysts believe heightened volatility in the currency market is likely to persist, fueled by speculation around U.S. trade policies.
India’s markets, already grappling with inflationary concerns, could face additional headwinds if tariffs are imposed. Export-heavy industries, including textiles and IT services, may see increased costs and reduced global competitiveness, further weighing on the rupee. The Reserve Bank of India is expected to monitor the situation closely, though its intervention remains uncertain.
While the USD/INR pair’s upward trend reflects immediate market concerns, long-term direction hinges on clarity from Trump’s administration and its policy execution. For now, the rupee faces a challenging path as investors navigate a mix of domestic pressures and external risks.
