Indian rupee breaks six-day losing streak after Trump drops Greenland-related tariff threat
- The currency ended at 91.63, higher than its previous close
MUMBAI: The Indian rupee broke its six-day declining streak by staging a mild recovery on Thursday, supported by an improvement in risk appetite after U.S. President Donald Trump stepped back from tariff threats against Europe linked to Greenland.
The Indian rupee opened higher against the dollar, but gave up some of the gains after it was unable to rise past the 91.50 per dollar level. The currency ended at 91.63, higher than its previous close and the record low of 91.7425 per dollar hit on Wednesday.
Traders said the move resembled the typical pattern of trade in the last few days, where recoveries in the rupee are struggling to hold.
The local currency plunged 0.8% on Wednesday to an all-time low of 91.7425 per dollar despite intermittent dollar selling by the central bank .
“Trump’s latest remarks eased fears of a broader U.S.–Europe trade dispute, offering some relief to emerging market currencies, including the rupee,” said Dipti Chitale, CEO at Mecklai Financial Services.
Still, she said delays in a U.S.-India trade agreement is hurting exports that face a steep 50% tariff, while steady dollar demand from importers is weighing on sentiment.
U.S. equities and Treasuries rallied after Trump said the U.S. would not proceed with tariffs on Europe that were scheduled to take effect from February 1, speaking at the World Economic Forum in Davos.
His remarks provided relief to Asian currencies, including the struggling rupee, as they ruled out an immediate flare up in trade tensions the use of force to capture Greenland.
Dollar demand and capital flows will continue to dominate currency moves, especially as foreign investors have withdrawn nearly $3 billion from Indian equities so far this month, which follows $18 billion of outflows last year.
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