FX.co ★ Indian Rupee Pressured Near Record Low

The Indian rupee hovered around 88.15 per dollar on Monday, remaining close to its record low as the market reacted to new US tariffs on Indian exports and notable foreign equity outflows. The move past the significant 88 threshold last week surprised investors, especially since the Reserve Bank of India chose not to intervene aggressively, permitting speculative dollar demand to further pressure the currency. On the economic front, India's GDP growth for the June quarter exceeded forecasts, though experts warn that this performance was largely influenced by temporary factors, including front-loaded government expenditures and pre-tariff export spikes. The overall weakness of Asian currencies also affected investor sentiment, as attention shifted to forthcoming US labor reports, which could influence the Federal Reserve's perspective on future rate cuts. In the geopolitical realm, India and China reaffirmed at the Shanghai Cooperation Organization summit that their relationship is cooperative rather than adversarial, with President Xi anticipated to make defining statements.