Rupee logs worst day in 3 weeks to again hit the 87 mark against dollar on tariff worries

Rupee

The Indian rupee logged its worst day in three weeks on February 25 by falling 50 paise as the dollar edged up on safe-haven flows after US President Donald Trump said tariffs against Mexico and Canada would go ahead as planned.

Month-end dollar demand over fixing and the RBI position squaring up also added to the decline of the rupee, which fell from 86.85 to 87.25, Anil Kumar Bhansali, Head of Treasury and Executive Director, Finrex Treasury Advisors LLP, said.

The rupee ended at 87.21 to the US dollar, down from 86.6950 in the previous session, its biggest single-day fall since February 5.

Apart from the rupee, other Asian currencies also depreciated against the dollar during the day. According to Bloomberg data, the rupee is down 0.51 percent from previous day's close, the Thai Baht 0.52 percent and the Indonesian Rupiah 0.43 percent.

The dollar index, which measure American currency's value against six major global peers, rose to 106.769 in the afternoon trade. The ended the previous session at 106.596.

The dollar clawed back some losses after falling to its lowest in two-months the previous day, buoyed by safe haven flows after Trump said that tariffs on Mexico and Canada were on track.

Addressing a press conference with visiting French President Emmanuel Macron, Trump said on February 24 that the 25 percent tariffs planned for Canada and Mexico, United States’s two biggest trading partners, would kick in from March.

“We’re on time with the tariffs, and it seems like that’s moving along very rapidly,” Trump said. “We have been mistreated by many countries, not just Canada and Mexico and have been taken advantage of.”

Trump had earlier agreed to put the tariffs on hold for a month.