The Indian rupee strengthened in early trade on Tuesday after US President-elect Donald Trump denied a media report suggesting his tariffs may not be as tough as feared.
The rupee was at 85.6750 against the US dollar at 10:10 am IST, up from its close at 85.8275 in the previous session. The rupee fell to its all-time low of 85.84 on Monday.
The dollar fell about 1% against major peers following a Washington Post report that Trump aides are considering tariffs on all countries, but only on sectors considered essential to national security or economical.
Mr. Trump’s denial of the report supported the dollar and helped it halve its initial losses.
The Dollar Index was last quoted at 108.2 while Asian currencies saw slight gains. The Dollar Index has risen about 3% since Trump’s election in November.
“If we have learned anything over the years, it is that Trump is unpredictable. He loves to shake up the markets, but the end results are often less dramatic than his initial announcements,” ING bank said in a note.
“As our traders say: welcome to the era of Trump 2.0.”
During the day, the rupee also benefited from heavy dollar selling by at least two major foreign banks, probably on behalf of conservative clients, a trader at a state bank said.
Benchmark Indian stock indices were in the green after falling over 1.5% in the previous session.
Concerns about India’s slowing economic growth have helped keep investment flows into Indian stocks at a moderate level.
Foreign investors have sold shares worth around $800 million net in January so far.
Investors will be watching the first estimates of India’s gross domestic product for the current financial year, which are due to be released later today. An initial government projection had set GDP growth at 6.5%-7%.
Swiss
