FX.co ★ Indian Rupee Pressured by Trump Tariff Threat

The Indian rupee hovered near 87.7 per dollar on Thursday, inching towards a record low reached in February. This movement followed the announcement by US President Trump of a forthcoming 25% tariff on Indian goods, effective August 1. Trump also issued a warning of potential increased penalties on certain industries, stemming from India's continued trade with Russian oil firms. Nevertheless, Trump noted that negotiations with India are ongoing. Meanwhile, New Delhi displayed resilience, maintaining its firm trade position. Analysts assert that India is negotiating from a position of strength, buoyed by active agreements with other nations and its limited dependence on US exports. A critical aspect of India's trade strategy is the protection of its agricultural sector, evidenced by its recent UK agreement that avoided tariff concessions. Meanwhile, inflation has decreased to a six-year low of 2.1%, underscoring expectations of further rate cuts by the Reserve Bank of India.