Rupee rises 17 paise to 86.28 against U.S. dollar in early trade

Forex traders react to Trump's tariff threats, rupee strengthens against the dollar amid market volatility.

Rupee appreciated 17 paise to 86.28 against the U.S. dollar in morning trade on Tuesday (January 21, 2025), as the U.S. dollar index and crude oil prices retreated from their elevated levels.

Forex traders said the dollar weakened from its 109 levels but clawed back to 108.31 as Donald Trump declared tariffs against Canada and Mexico in the near future but stopped short of declaring any tariffs against China.

While uncertainty eased slightly, concerns regarding tariffs still lingered in the background, as the traders began to adjust their expectations, betting that even if tariffs were imposed, they would likely be less aggressive, traders said.

At the interbank foreign exchange, the rupee opened at 86.28, registering a rise of 17 paise from its previous close of 86.45 against the greenback. The local unit also touched 86.43 against the U.S. dollar initial trade.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading lower by 0.94% at 108.31.

Brent crude, the global oil benchmark, fell by 0.05 per cent to USD 80.11 per barrel.

India's markets found themselves caught between pressure and promise. The rupee has been pressured by consistent foreign institutional outflows, totaling a whopping USD 6.73 billion this month, CR Forex Advisors MD Amit Pabari said.