- Indian Rupee (INR) falls towards an all-time low
- US – India trade deal is still absent
- The US Dollar (USD) is falling versus major peers
- Trump trade tariffs threats prompt investors to sell U.S.-related assets
The US dollar-to-Indian rupee (USD/INR) exchange rate is rising for a fourth day. The pair rose 0.21% in the previous session, settling on Monday at 90.90. At 19:30 UTC on Tuesday, the pair is rising 0.17% at 91.06.
The Indian rupee is falling further on Tuesday amid risk-off trade, moving towards all-time lows. The rupee is down against the US dollar even as the dollar falls against its major peers, as demand from Indian importers remains firm amid the absence of a trade deal between the US and India.
Negotiators from both the US and India have expressed confidence that the deal is close, but have not yet reached a consensus.
This lack of a trade deal remains a key reason for foreign institutional investors offloading their stakes in the Indian equity market consistently over the past six months.
On a more positive note, India is said to be close to achieving a trade deal with the EU.
Another piece of good news is that the IMF lifted India’s growth forecast to 7.3%, citing strong momentum, but said growth is likely to slow to 6.4% in the following two fiscal years.
The US Dollar is rising against the Rupee but falling across the board. The US Dollar Index, which measures the US dollar against a basket of major currencies, is down 0.78% to 98.62.
The US dollar is falling versus its major peers amid rising concerns over the escalation in President Trump’s rhetoric on trade tariffs to acquire Greenland.
Trump has doubled down on his pledges to take Greenland from Denmark, threatening to impose 10% tariffs on major European economies on February 1, which will increase to 25% in June if there is still no deal.
In the meantime, the EU has signalled that it could retaliate with €93 billion worth of tariffs. Investors are selling US stocks, the USD and treasuries amid heightened policy uncertainty.
