The rupee opened 24 paise down against the dollar on June 3 amid tariff uncertainty and lack of momentum, a day after outperforming Asian peers.
The currency opened at 85.5238 against the dollar after ending the previous session at 85.28.
The dollar index, which measures the greenback's strength against a basket of six major currencies, rose to 98.873 in the early trade. The index, which closed at 98.706 the previous day, has been under pressure over policy uncertainty and concerns over US fiscal deficit.
The Trump administration’s renewed protectionist stance, unpredictable tariff threats, and tax policies have rattled institutional investors, Amit Pabari, managing director at CR Forex Advisors, said. These factors have caused a broad-based selloff in US equities and debt, pulling capital out of the dollar and shifting into safer or higher-yielding assets globally.
The dollar index is likely to move in a narrow range, facing strong resistance near the 99.80–100 zone and gradually declining toward 98, followed by 97.50, Pabari added.
On June 2, the rupee appreciated on inflows from foreign investors in domestic equities.
As the dollar index falls and Asian currencies gain, the rupee could move towards 85 sooner than later, Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP, said.
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