Rupee hits five-month low on trade deal uncertainty

The rupee closed at a five-month low on Wednesday (July 30) amid uncertainty over the India-US trade deal. The local currency fell 52 paise to end at 87.43 (provisional) against the US dollar.The rupee opened at 87.10 and touched an intra-day low of 87.05 before settling at its lowest level since February. On Tuesday (July 29), the rupee had closed at 86.91, also under pressure.
Forex traders said month-end dollar demand from importers and sustained foreign fund outflows weighed on the currency.
Market sentiment weakened further after US President Donald Trump hinted at new tariff rates of 20–25% on Indian goods if a deal is not finalised before the August 1 deadline.Anuj Choudhary, Research Analyst at Mirae Asset Sharekhan, said the rupee could slide further if trade talks fail to make progress. Rising global oil prices and continued foreign fund outflows may also keep the rupee under pressure, he added.

Traders remain cautious ahead of the US Federal Reserve and Bank of Japan’s policy decisions this week. They will also watch for fresh US economic data, including GDP and employment numbers.Meanwhile, Kunal Shah, Head of Commodities at Nirmal Bang, said the rupee’s recent weakness may be short-lived. He expects the dollar index to weaken as the US takes on more debt. Shah believes the rupee could strengthen back to 85–83 levels in the coming months if the US cuts interest rates further.

In equities, the BSE Sensex gained 143.91 points to close at 81,481.86. The Nifty rose 33.95 points to settle at 24,855.05.

Foreign institutional investors sold shares worth ₹4,636.60 crore on Tuesday (July 29), according to exchange data.

–With agencies inputs

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