Rupee's Decline Against the Dollar

The Indian rupee weakened by 10 paise, closing at Rs 85.80 against the US dollar on Friday. This decline was influenced by weak domestic equity markets, escalating global trade tensions, and a strengthening dollar index.

Market Reactions and Analyst Insights

Analysts predict continued pressure on the rupee due to ongoing trade uncertainties. Anuj Choudhary, Research Analyst at Mirae Asset Sharekhan, mentioned, "We expect the rupee to weaken as the trade war continues to dent global risk sentiments." The USD-INR pair is anticipated to trade between 85.55 to 86.25.

Global and Domestic Factors

The rise in US tariffs on Brazil and Canada has added to global uncertainty, affecting emerging market currencies. Meanwhile, India's forex reserves saw a significant drop, and equity markets experienced a downturn, with the BSE Sensex and NSE Nifty both falling.

Trade Negotiations Between India and the US

India is in talks with the US to finalize a bilateral trade agreement, focusing on sectors like agriculture and automobiles. A commerce ministry team is expected to visit Washington soon for further discussions.