- Indian Rupee (INR) is falling after gains yesterday
- US tariffs on India are hitting the currency
- US Dollar (USD) is rising versus major peers
- US payroll revisions showed the labour market is weaker
The US dollar-to-Indian rupee (USD/INR) exchange rate rose on Tuesday after two days of losses. The pair fell 0.23% in the previous session, settling on Monday at 87.98. At 21:30 UTC, USD/INR trades 0.29% at 88.23 and traded in a range of 87.94 to 88.25.
The Rupee weakened on Tuesday near historic lows against the USD as steep US tariffs continued to weigh on market sentiment. The US imposed a 50% tariff on Indian imports from August 27, punishing India for its discounted Russian oil.
Sustained dollar demand from importers and portfolio outflows could keep pressure on the Rupee.
On the data front, figures on Friday are expected to show that Indian consumer inflation pushed higher in August after nine straight months of decline. Consumer inflation was forecast to rise to 2.1% in August from 1.55% in July.
Base effects likely faded in August, coinciding with an acceleration in food prices, which account for almost half the CPI basket.
The US Dollar rose across the board. The US Dollar Index, which measures the greenback against a basket of major currencies, is rising 0.3% at 97.74, after two days of losses yesterday.
The US dollar has recovered from a seven-week low despite data showing that the US jobs market was much weaker than initially expected.
The Bureau of Labour Statistics reported that the US economy had created almost 1,000,000 fewer jobs through to March 2025 than previously reported. This marked the largest revision since records began in 2002, slashing average monthly job growth by 76,000 versus previous estimates.
The data strengthened the case for rate cuts; the markets are pricing in a 92% probability of a 25-basis-point rate cut at the September 17 meeting.
However, the US dollar gained on safe-haven flows as the market showed nerves about the deteriorating picture for the US economy.