The rupee on Wednesday tested a new low of 91.57 per US dollar in intraday trade so far, amid global stock and financial markets getting roiled due to US President Trump’s plan to acquire Greenland, an autonomous territory of Denmark. Trump’s plan has raised the hackles of the European Union.
The Indian unit opened 8 paise weaker at 91.05 per USD against the previous close of 90.97, according to the CCIL website.
Amit Pabari, MD, CR Forex Advisors, observed that while in theory, a softer dollar should help emerging market currencies, in reality, uncertainty changes the rules. When fear rises, money looks for safety, not yield.
Capital flows out, and currencies like the rupee struggle to benefit, even when the dollar weakens, he added.
Pabari noted that amid the noise, one supportive note emerged. “European Commission President Ursula von der Leyen said the EU is “on the cusp” of signing a historic trade deal with India, calling it the ‘mother of all deals’.
“If completed, it would create a market of two billion people and give Europe a first-mover advantage in one of the world’s fastest-growing regions. It is not an immediate shield for the rupee — but it is a promise on the horizon,” he said.
Pabari underscored that for now, uncertainty remains the dominant force. Persistent global unease, coupled with a sustained break above 91.07, could gradually open the door towards the 91.70–92.00 zone, unless restrained by active intervention from the RBI, he said.
On the downside, any corrective pullback is likely to find its first line of support in the 90.30–90.50 range.