Relief for Indian rupee after India left out of US tariff hike; Asia shrugs off Trump move
Trump's comments about nearing a trade agreement with India are supportive of the rupee, according to traders.
The 1-month non-deliverable forward indicated a open in the 85.70-85.75 range, versus 85.8500 in the previous session.
Trump on Monday sent letters to 14 countries, including Japan and South Korea, outlining higher import tariffs. However, the implementation was pushed to August 1, providing countries a few more weeks to reach trade deals.
The original deadline for reaching the deal was July 9.
The U.S. president said the August deadline was 'firm, but not 100% firm' suggesting there was room for agreements.
Shares in Japan and South Korea rose, suggesting investors were more focused on the tariff delay than the prospect of higher duties.
'Though Trump's letters suggest a take-it-or-leave-it offer, the reality is that they have effectively extended the tariff deadline from July 9 to August 1,' ING Bank said in a note.
'Despite repeatedly insisting that no extension would be granted, the U.S. administration has provided countries another three weeks to finalise more (principle) trade deals.'
On India, Trump said he was near to making a deal with the country.
'That the U.S. might strike a deal with India, while largely priced in, is still a marginal positive for the rupee,' a currency trader at a private bank said.
'More importantly, Asian markets are not reacting much to the latest salvo from Trump, which is helping overall sentiment.'
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