By Nimesh Vora
MUMBAI (Reuters) – The Indian rupee weakened further on Friday, extending its late-session slide from the previous day, as the dollar rose ahead of a speech by Federal Reserve Chair Jerome Powell and on renewed concerns of steep U.S. tariffs on local goods.
The rupee fell to an intraday low of 87.4850 and was last at 87.4550, compared with its close of 87.27 in the previous session. On Thursday, the currency had briefly climbed past 87 before reversing course in the afternoon to mark its sharpest one-day decline in a month.
“Thursday’s move, and then today, shows tariff fears are back on the table after a brief lull,” a Mumbai-based currency trader said, referring to the possibility of Washington imposing additional tariffs of up to 50% on Indian goods from August 27.
“The added uncertainty around Powell’s speech just makes it harder for the rupee,” he added.
The dollar index advanced towards 99 ahead of Powell’s comments at the Federal Reserve’s annual Jackson Hole symposium, while most Asian currencies were weaker on the day.
Investors are pricing in an over 80% chance of a rate cut at the Fed’s September meeting, but the question is whether Powell will push back against such aggressive expectations.
“We do not expect Powell to decisively signal a September cut, but the speech should make it clear to markets that he is likely to support one,” Goldman Sachs said in a note.
The brokerage reckons that most Fed policymakers who have mixed feelings about cutting rates next month will be willing to support a reduction if Powell presses for one.
(Reporting by Nimesh Vora; Editing by Sonia Cheema)
