On January 22, 2025, the Indian rupee traded at 86.58 against the U.S. dollar, reflecting a subdued performance influenced by global and domestic factors.
The 1-month non-deliverable forward suggested the rupee would open slightly stronger at 86.50–86.52 per dollar, compared to its previous close of 86.5775.
Most Asian currencies advanced against the U.S. dollar, buoyed by the positive sentiment from Donald Trump’s inauguration.
However, the rupee faced challenges. In early trade on Tuesday, it briefly rallied past 86.30, supported by favourable Asian cues, before slipping back due to persisting concerns.
The direction of Asian currencies remains tied to Trump’s trade policies. While he refrained from imposing tariffs immediately after taking office on Monday, his rhetoric on Tuesday unsettled markets.
Trump vowed to introduce tariffs on the European Union and announced discussions around a 10% punitive duty on Chinese imports. This led to a decline in the offshore Chinese yuan to 7.2850 against the dollar, further heightening regional currency volatility.
Significant foreign outflows also hinder the rupee’s performance from Indian equities. Data from the National Securities Depository Limited (NSDL) revealed that foreign investors had withdrawn $6 billion from Indian equities in January. Increased hedging activity due to tariff uncertainties has further weighed on the currency, adding to its challenges.
Oil prices fell on Tuesday after U.S. President Donald Trump declared a national energy emergency on his first day in office, sparking concerns about increased U.S. output in an already oversupplied market.
Brent crude futures dropped 86 cents, or 1.1%, to settle at $79.29 per barrel. Meanwhile, U.S. West Texas Intermediate (WTI) crude futures for February delivery fell $1.99, or 2.6%, to $75.89 during its final trading session.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their research and assessments to form an independent opinion about investment decisions.
Investments in the securities market are subject to market risks, read all the related documents carefully before investing.
Published on: Jan 22, 2025, 9:20 AM IST
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