The rupee traded near its yearly high, supported by broad-based dollar weakness and position unwinding by traders.
“If the rupee held up on a day like yesterday, you have to wonder what will trouble it,” said a currency trader at a private bank.
“I keep thinking there is no more downside on the dollar/rupee pair, and yet it keeps falling,” the trader added.
The dollar index dropped nearly 2% on Thursday (April 3) — its steepest fall in over two years — as markets reacted to Trump’s proposed 10% baseline tariff on all US imports. Higher duties on countries like India also rattled investors.
Analysts say the US tariff plan could fuel inflation and dent growth, leaving the dollar vulnerable.
ING Bank said in a note, “The blowback on the US economy leaves the dollar naked, with investors fearing the impact on confidence and activity.”
The market now expects the US Federal Reserve to deliver up to four rate cuts this year, beginning June.
The 2-year US Treasury yield slid to its lowest level in six months, adding further pressure on the greenback.
Other Asian currencies also advanced on Friday (April 4), with the Korean won leading gains. Indian equities extended Thursday’s (April 3’s) losses, mirroring global weakness.
–With inputs from Reuters
