Indian rupee slips but sidesteps firmer dollar as flows dominate price-action
The rupee closed at 86.6650 against the U.S. dollar, 0.2% down from its close of 86.5150 in the previous session.
While the rupee was trading marginally stronger in the first half of the session, it reversed course in the latter half as the dollar index rose. Asian currencies were a tad lower on the day, with the offshore Chinese yuan down by 0.1%.
The rupee is 'only reacting to flows' over recent sessions, and has found some support above 86.60, a trader at a state-run bank said, pointing to price action driven by foreign portfolio flows and corporate activity.
India's benchmark equity indexes, the BSE Sensex and Nifty 50 fell 0.7% and 0.63% on the day, respectively, diverging from gains in most regional equities.
The country's benchmark 10-year bond yield, meanwhile, ticked up to 6.3603%.
Equities in Europe were mostly higher while the euro fell, after the U.S. and EU reached a trade agreement over the weekend and investors welcomed the deal with cautious optimism.
Indian rupee slides for third straight week as tariff deadline, Fed decision near
The euro's recent price action 'likely reflects more general U.S. dollar sentiment that was improving toward the end of last week, and we suspect (the sentiment) could extend further this week as investors' optimism over the U.S. economy improves,' MUFG said in a note.
U.S. economic data, including the closely watched non-farm payrolls report, will be in focus as investors gauge how far the optimism extends.
The Federal Reserve, meanwhile, will deliver its policy decision on Wednesday and is widely expected to keep rates unchanged. Interest rate futures are currently pricing in a little over 60% chance of a rate cut in September, per CME's FedWatch tool.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Business Recorder
21 minutes ago
- Business Recorder
India slams ‘unjustified' action by US, EU over its Russian oil purchases
NEW DELHI: India's foreign ministry said Monday that the United States and European Union were 'targeting' it due to its buying of Russian oil, adding that the moves were 'unjustified' and that it would protect its interests. 'The targeting of India is unjustified and unreasonable,' India Foreign Ministry spokesman Randhir Jaiswal said in a statement, after US President Donald Trump vowed to raise tariffs on the country over its oil purchases from Russia. 'Like any major economy, India will take all necessary measures to safeguard its national interests and economic security.' It did not provide further details on the measures. India became a major buyer of Russian oil, providing a much-needed export market for Moscow after it was cut off from traditional buyers in Europe because of the Ukraine war. New Delhi saved itself billions of dollars while bolstering Moscow's coffers. But India on Monday argued it 'began importing from Russia because traditional supplies were diverted to Europe after the outbreak of the conflict'. It also noted that Washington at that time had 'actively encouraged such imports by India for strengthening global energy markets stability.' Trump says will 'substantially' raise tariffs on goods from India over Russian oil purchases It pointed to what it suggested were double standards of EU and US trade with Moscow. 'It is revealing that the very nations criticising India are themselves indulging in trade with Russia,' Jaiswal added. 'Unlike our case, such trade is not even a vital national compulsion.' Jaiswal singled out examples of where deals were being done with Moscow. 'Europe-Russia trade includes not just energy, but also fertilisers, mining products, chemicals, iron and steel and machinery and transport equipment,' the statement added. 'Where the United States is concerned, it continues to import from Russia uranium hexafluoride for its nuclear industry, palladium for its EV industry, fertilisers as well as chemicals.' India, the world's most populous country, was one of the first major economies to engage the Trump administration in broader trade talks. The United States is India's largest trading partner, with New Delhi shipping goods worth $87.4 billion in 2024. India's protectionist trade policies, however, saw it run up a surplus of nearly $46 billion the same year. On Monday, Trump said in a post to his Truth Social platform that India was 'buying massive amounts of Russian Oil' and selling it for 'big profits.' 'Because of this, I will be substantially raising the Tariff paid by India to the USA,' he wrote. But he did not provide details on what tariff level he had in mind. For now, an existing 10 percent US tariff on Indian products is expected to rise to 25 percent come Thursday. Last month, the EU and Britain sought to ramp up economic pressure on Russia to halt the war in Ukraine by slashing a price cap meant to choke off revenues from key oil exports.
Business Recorder
3 hours ago
- Business Recorder
Trump says will ‘substantially' raise tariffs on goods from India over Russian oil purchases
WASHINGTON: US President Donald Trump said on Monday he will substantially raise tariffs on goods from India over its purchases of Russian oil. 'India is not only buying massive amounts of Russian Oil, they are then, for much of the Oil purchased, selling it on the Open Market for big profits. They don't care how many people in Ukraine are being killed by the Russian War Machine,' Trump said in a post on Truth Social. 'Because of this, I will be substantially raising the Tariff paid by India to the USA.' He did not elaborate on what the tariff would be. Indian state refiners pause Russian oil purchases, sources say India's trade ministry did not immediately respond to a request for comment. Trump last week said he would impose a 25% tariff on goods imported from India and added that the world's fifth-largest economy would also face an unspecified penalty but gave no details. Over the weekend, two Indian government sources told Reuters that India will keep purchasing oil from Russia despite Trump's threats. The sources did not wish to be identified due to the sensitivity of the matter.
Business Recorder
3 hours ago
- Business Recorder
India's biggest refiner buys US, Middle East crude as Trump slams Russia purchases
SINGAPORE/NEW DELHI: Indian Oil Corp has bought 7 million barrels of crude from the United States, Canada and the Middle East, four trade sources said on Monday, as U.S. President Donald Trump ramped up his criticism of the country over its purchases of Russian oil. India is the biggest buyer of seaborne crude from Russia, which is under Western-led sanctions over its war in Ukraine. Its main refiners paused buying Russian oil last week as discounts to other suppliers narrowed after Trump threatened hefty tariffs on imports from countries that make any such purchases, Reuters reported last week. Indian government officials denied any policy change. On Monday, Trump said on Truth Social he would substantially raise the import levy on Indian goods, accusing the country of not only buying massive amounts of Russian oil but 'they are then, for much of the Oil purchased, selling it on the Open Market for big profits'. India imported about 1.75 million barrels per day of Russian oil from January to June this year, up 1% from a year ago, according to data provided to Reuters by trade sources. IOC, India's largest refiner, bought crude via a tender from the United States, Canada and the Middle East for September arrival, the trade sources said on Monday. They declined to be named because they were not authorised to speak to the media. Trump: will 'substantially' raise tariffs on goods from India over Russian oil purchases The refiner bought 4.5 million barrels of U.S. crude, 500,000 barrels of Western Canadian Select (WCS) and two million barrels of Das oil produced in Abu Dhabi, the sources said. The higher-than-normal purchases are partly to replace Russian barrels, two of the sources said. Indian state refiners - IOC, Hindustan Petroleum Corp , Bharat Petroleum Corp and Mangalore Refinery Petrochemical Ltd - had not sought Russian crude in the past week or so, Reuters reported last week. Indian companies do not comment on oil purchases. In IOC's tender that closed on Friday, P66 and Equinor will each ship 1 million barrels of U.S. West Texas Intermediate Midland crude while Mercuria will ship 2 million barrels of the same grade, the sources said. Vitol will deliver 1 million barrels of WTI Midland and WCS, they added. Trafigura will deliver 2 million barrels of Das. Prices for the deals were not immediately available. U.S. criticism of India's oil purchases from Russia sharpened after New Delhi and Washington failed to reach an agreement on a trade deal, prompting the Trump administration to levy a 25% import tariff on Indian goods.
