India, February 3:
The Indian rupee weakened by 67 paise on Monday, reaching an all-time low of 87.29 against the US dollar in early trade. This decline came after former US President Donald Trump imposed new tariffs on Canada, Mexico, and China, heightening concerns of a potential global trade war.
Under the new tariff measures, Canada and Mexico face 25% duties, while China has been hit with a 10% duty. Forex analysts warned that these actions could mark the beginning of a prolonged trade conflict with serious economic repercussions.
According to currency traders, the rupee remains under pressure due to ongoing foreign fund withdrawals and the US dollar’s strong performance in global markets. Increased dollar demand from oil importers and a lack of risk appetite have further contributed to the rupee’s decline.
At the interbank foreign exchange market, the domestic currency opened at 87 before slipping further to 87.29 per dollar in early transactions, marking a significant drop from its previous close.
On Friday, the rupee had ended the trading session relatively stable at 86.62 per US dollar.
“The start of the week saw financial markets on edge as US President Donald Trump followed through on his tariff threats, imposing duties on imports from Mexico, Canada, and China,” said Amit Pabari, Managing Director of CR Forex Advisors.
The escalating trade tensions have increased demand for safe-haven assets like the US dollar, driving it towards the 109.50 level, Pabari added.
Meanwhile, the dollar index, which measures the greenback’s strength against six major currencies, was up 1.30% at 109.77.
About The Author
