• Indian Rupee (INR) falls after gains yesterday
  • Worries of pharmaceutical tariffs weigh
  • US Dollar (USD) rises versus major peers on safe-haven flows
  • US retail sales slump

The US dollar-to-Indian rupee (USD/INR) exchange rate is rising for a second day. The pair rose 0.13% in the previous session, settling on Thursday at 85.58. At 19:30 UTC, USD/INR traded 0.60% higher at 86.09 and traded in a range of 85.90 to 86.20.

The Indian rupee is falling, dropping to a two-month low due to geopolitical tensions in the Middle East, rising oil prices, and President Trump’s remark that pharmaceutical tariffs are coming soon.

The Iran-Israel conflict extended into a fifth straight day, hurting risk sentiment. President Trump left the G7 meeting early, citing the Middle East and tensions, adding to the risk-off mood, hitting the rupee while sending oil prices sharply higher. Oil rose to $73.39, up over 2% on the day.

Meanwhile, President Trump also warned that pharmaceutical tariffs were coming very soon. Indian drugmakers earn a significant share of their revenue from the US, accounting for about one-third of the industry’s overall exports.

The US Dollar is rising across the board. The US Dollar Index, which measures the greenback against a basket of major currencies, is rising 0.74% to 98.74 after yesterday’s losses.

The U.S. dollar is rising on safe-haven flows amid ongoing tensions in the Middle East and despite weaker-than-expected US retail sales data.

The US dollar has returned as a safe haven play as the conflict between Iran and Israel continues, and As trump says, the US won’t kill Iran’s leader, at least not for now.

On the data front, U.S. sales were weaker than expected, falling by the most in two years in May. Data showed that US retail sales slumped 0.9% month over month in May, following months of stockpiling ahead of Trump’s trade tariffs and as consumer sentiment deteriorated due to Trump’s erratic trade policies.

Looking ahead, attention turns to the Federal Reserve interest rate decision tomorrow, where the central bank is widely expected to leave rates unchanged at 4.25% to 4.5%