By Jaspreet Kalra
MUMBAI (Reuters) – The Indian rupee slipped on Thursday, pressured by routine dollar demand from importers, even as its Asian peers benefited from a broadly weaker dollar.
The rupee closed at 85.78 against the U.S. dollar, down 0.1% on the day.
The local unit traded sideways after a decline in early trade that baked in the impact of carry costs following a shift in the spot date from the last day of the current financial year to the first day of the next one.
With India’s money markets shut on March 31 and April 1 for local holidays, Thursday’s spot trades will be settled on April 2, while Wednesday’s spot date is March 28.
Local oil companies and importer clients were bidding for dollars on Thursday, although demand was not too aggressive, while foreign banks were also intermittently on offer, a trader at a mid-sized private bank said.
The rupee has been largely rangebound after logging a nine-day winning run that snapped on Tuesday. Traders reckon the next significant cue for the currency will come from the announcement of U.S. reciprocal tariffs on April 2.
Analysts at Bank of America believe that the rupee could be exposed to headline risk, while Goldman Sachs expects markets to be negatively surprised on the day.
U.S. President Trump has said that he may take a lenient approach to reciprocal tariffs, but traders reckon there will be little certainty till the final outcome.
On Thursday, the dollar index was down about 0.2% at 104.5, while most Asian currencies rose. Markets have had a relatively muted reaction to Trump’s announcement of a 25% levy on auto imports.
“The weak reaction in FX to the tariff news could also suggest the market is moving on from the announcement effect to looking at how tariffs impact business and consumer confidence and, ultimately, the hard data of consumption and business investment,” ING Bank said in a note.
(Reporting by Jaspreet Kalra; Editing by Sonia Cheema)
