MUMBAI: The Indian rupee closed nearly unchanged on Wednesday, tracking a muted reaction in global markets to the latest trade salvos from the White House, with traders in the domestic market awaiting news on a U.S.-India trade deal.
The rupee ended at 85.6725 against the U.S. dollar, nearly unchanged from its close at 85.6950 in the previous session.
Asian currencies were little changed to a tad weaker, while the dollar index retreated slightly from a two-week high hit on Tuesday to last quote at 97.5.
The rupee touched a low of 85.9225 earlier in the day but pared losses later in the session amid routine flows from merchants and mild dollar sales from a few foreign banks, according to traders.
For now, 86 is holding as a support for the rupee while resistance is near 85.30-85.40 levels, a trader at a state-run bank said.
Regional stock markets traded mixed as investors digested Trump’s latest trade salvos, including a 50% charge on copper imports and threats of levies on semiconductors, pharmaceuticals and a 10% charge on imports from BRICS nations.
Trump’s tariff blitz to weigh on Indian rupee, hurts Asia FX
India’s benchmark equity indexes, Nifty 50 and BSE Sensex, dipped by about 0.2% each.
“While tariff decisions have influenced – and will continue to influence – the Fed, markets are now more focused on incoming data, given the volatility and unpredictability of US trade policy,” ING said in a note.
Trade announcements related to a few countries are expected later in the day, per social media posts from Trump.
The minutes of the Federal Reserve’s June policy meeting are also due later in the day and will be closely watched for cues on the future path of U.S. policy rates.
The cues are expected to influence dollar-rupee forward premiums, which were little changed on the day.
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