Rupee plunges to 87.19 against U.S. dollar on FII sale-off, Trump threat

The rupee fell sharply by 47 paise to settle at 87.19 against the U.S. dollar on Tuesday due to month-end dollar demand by importers amid uncertainty over U.S. trade tariffs.

Elevated greenback against major crosses and sustained FII outflows also contributed to the decline in the domestic unit, forex traders said.

“The rupee fell by more than half a percent against the dollar, marking its biggest intraday drop in the past three weeks. However, after the steep fall, a slight recovery was observed,” said Rahul Kalantri, vice president (Commodities), Mehta Equities Ltd.

“The drop in the rupee against the dollar came after U.S. President Trump’s statement on tariffs related to Mexico and Canada. Adding to this, fresh sell-off in the domestic equity markets from the FPI’s put further pressure on the rupee,” he said.

“The rupee traded very weak as FII sell-off continued and crude oil prices remained elevated amid US tariffs on Iran, which pushed oil demand higher,” said Jateen Trivedi, VP Research Analyst – Commodity and Currency, LKP Securities.

“The dollar index at 106.65$ also added to the pressure on the rupee,” he said.

“With continued capital outflows and rising crude prices, the rupee’s weakness may persist. Support is seen near 87.45, while resistance remains at 86.85. Market focus remains on global risk sentiment, oil price trends, and central bank policy signals,” he added.

(With PTI inputs)