Rupee extends rally, trades below 85 as dollar crumbles

Fall in the dollar and crude prices have strengthened the rupee.

The rupee extended the previous session’s gains on April 4 to emerge strongest in three months, trading below 85 against the dollar, which has been hammered on concerns that the US’ sweeping tariffs will hit growth. Falling Brent prices also helped the rupee.

The rupee was trading at 84.9913 against the US dollar after opening at 85.04, almost 40 paise up from the previous close of 85.44.

The last the rupee traded below the 85-mark was on December 18, Bloomberg data shows.

The dollar index, which measures American currency's against six major global peers, fell to 101.798 in the early trade. It ended the previous session at 102.072.

Currency experts attributed the fall to aggressive-than-expected tariffs announced by US President Donald Trump the previous day, triggering fears of a recession in his country and worries about global growth.

The Brent fell sharply and traded at $69.64 a barrel in early trade.

"Crude oil prices plunged after the US President announced heavy reciprocal trade tariffs, triggering fears of slower global demand. A sharp tariff hike on China spooked energy markets, leading to crude oil’s biggest single-day fall in three years," said Rahul Kalantri, VP Commodities, Mehta Equities Ltd.

Prices also tumbled as OPEC+ unexpectedly agreed to raise production in May to 411,000 barrels a day, significantly higher than the previously planned 135,000 bpd. Rising OPEC+ output and weaker demand due to trade tariffs may keep crude oil prices under pressure, Kalantri said.

The rupee is likely to trade in the 84.95-85.25 range against the dollar, with an appreciation bias, Abhishek Goenka, founder & CEO of India Forex & Asset Management (IFA Global), said.