Rupee falls 19 paise to 87.37 against US dollar in early trade

Mumbai, Feb 28 (PTI) The rupee declined 19 paise to 87.37 against the US dollar in early trade on Friday, as the strength of the American currency and a negative trend in domestic equities dented investor sentiments.

Forex traders said the ongoing uncertainty surrounding tariff imposition by the US has left financial markets in flux. Moreover, the tariff chaos has injected volatility and uncertainty into the US Dollar Index.

At the interbank foreign exchange, the rupee opened at 87.32, then fell to 87.37 against the American currency, registering a decline of 19 paise over its previous close.

On Thursday, the rupee settled almost flat with a marginal gain of 1 paisa at 87.18 against US dollar.

"The Indian rupee depreciated by 20 paise influenced by rising geopolitical tensions and the looming threat of trade wars," CR Forex Advisors MD Amit Pabari said.

Moreover, the Reserve Bank of India is actively intervening near the 87.40 level to curb excessive depreciation of the rupee, Pabari said, adding that all eyes are on the upcoming economic data releases, including India's GDP figures.

"The USD/INR pair is expected to remain at elevated levels, with strong support at 87.00 and resistance at 87.50-87.60, amidst rising geopolitical tensions," Pabari said.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was at 107.35, higher by 0.10 per cent.

Brent crude, the global oil benchmark, quoted 0.51 per cent lower at USD 73.66 per barrel in futures trade.

In the domestic equity market, the 30-share BSE Sensex was trading 917.03 points or 1.23 per cent lower at 73,695.40 in morning trade, while Nifty was lower by 272.15 points or 1.21 per cent to 22,272.90.

Foreign Institutional Investors (FIIs) offloaded equities worth Rs 556.56 crore in the capital markets on net basis on Thursday, according to exchange data.

On the global front, President Donald Trump plans to impose tariffs on Canada and Mexico starting Tuesday, in addition to doubling the 10 per cent universal tariff charged on imports from China.

The prospect of escalating tariffs has already thrown the global economy into turmoil - with consumers expressing fears about inflation worsening. PTI DRR DR

Source: PTI