Mumbai, Mar 27 (PTI) The rupee depreciated 24 paise to 85.93 against the US dollar in early trade on Thursday, as US President Donald Trump’s tariff policies reignited fears of a global trade war, fuelling inflation concerns and causing ripple effects across currency markets.
The US dollar strengthened after Trump late on Wednesday announced long-promised 25 per cent tariffs on automotive imports, set to take effect on April 2.
Forex dealers said the rupee is also facing renewed pressure on liquidity constraints, concerns over reciprocal tariff implementations and month-end demand for the US currency from importers.
However, foreign fund inflows supported the rupee at lower levels.
At the interbank foreign exchange, the rupee opened at 85.90 against the greenback, then lost ground and touched 85.93, down 24 paise from its previous close.
On Wednesday, the rupee settled higher by 3 paise at 85.69 against the US dollar.
Given the current global and domestic market dynamics, the USD/INR pair is expected to find strong support around 85.40-85.50, with the potential for a rebound towards 86.50 in the short term, CR Forex Advisors MD – Amit Pabari said.
Meanwhile, the US dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.22 per cent lower at 104.32.
Brent crude, the global oil benchmark, was trading 0.12 per cent higher at USD 73.88 per barrel in futures trade.
In the domestic equity market, the 30-share BSE Sensex was trading 284.21 points, or 0.37 per cent, higher at 77,572.71, while the Nifty was up 73.50 points, or 0.31 per cent, at 23,560.35.
Foreign institutional investors (FIIs) purchased equities worth Rs 2,240.55 crore on a net basis on Wednesday, according to exchange data.
