Indian rupee stalls as dollar rises on Trump’s tariff proposal

The Indian rupee lost most of its early gains and ended the day almost unchanged on Tuesday, as the US dollar rebounded following President Donald Trump’s announcement that he was considering imposing tariffs on Canada and Mexico.

The rupee ended the day at 86.5775 against the U.S. dollar, slightly lower than its previous close of 86.5675.

Although the rupee initially reached a high of 86.2825 during the session, it later retreated due to increased demand for the dollar and a 0.5 per cent increase in the dollar index following a two-week low on Tuesday.

Traders noted that state-run banks were occasionally seen offering dollars, which helped ease the pressure on the rupee.

On his first day in office, US President Donald Trump chose not to impose tariffs, causing the dollar to drop significantly.

However, he later mentioned the possibility of a 25 per cent tariff on imports from Canada and Mexico, leading to a rebound in the dollar.

US bond yields were down for the day but were able to reduce their losses, with the 10-year Treasury yield bouncing back to 4.57 per cent after reaching a nearly three-week low on Tuesday.

Attribution: Reuters

Subediting: Y.Yasser