Rupee settles 2 paise higher at 87.30 against U.S. dollar

The rupee pared initial losses and settled on a flat note with a gain of just 2 paise at 87.30 (provisional) against the U.S. dollar on Tuesday (March 4, 2025), as a weak U.S. Dollar index and a sharp fall in crude oil prices prevented the slide in the domestic unit.

Forex traders said the Indian rupee traded flat with a negative bias on a weak tone in the domestic markets. Foreign Institutional Investors (FIIs) continued to remain net sellers, which also weighed on the rupee.

However, weakness of the American currency in the overseas market and lower crude oil prices supported the unit.

At the interbank foreign exchange, the rupee witnessed high volatility. It opened at 87.38 then touched the intraday high of 87.27 and the low of 84.40 against the greenback. The unit ended the session at 87.30 (provisional) against the dollar, registering a gain of 2 paise from its previous closing level.

On Monday (March 3, 2025), the rupee settled with a gain of 5 paise at 87.32 against the U.S. dollar.

“We expect the rupee to trade with negative bias on account of weakness in the domestic markets and continued FII outflows. Uncertainty over the trade tariff issue may further pressurise the rupee.

“However, weak crude oil prices and weak tone in the U.S. Dollar may support the rupee at lower levels. USD-INR spot price is expected to trade in a range of 87.10 to 87.60,” said Anuj Choudhary – Research Analyst at Mirae Asset Sharekhan.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.40% lower at 106.31.

“The U.S. dollar fell on the ongoing trade tariff concerns and disappointing economic data from the U.S. ISM manufacturing PMI data fell to 50.3 in February vs 50.6 in January and forecast a rise to 50.9,” Mr. Choudhary said.

Brent crude, the global oil benchmark, fell 1.49% to $70.55 per barrel in futures trade.

In the domestic equity market, the 30-share BSE Sensex fell 96.01 points, or 0.13%, to settle at 72,989.93, while the Nifty slipped 36.65 points, or 0.17%, to close at 22,082.65 points.

Foreign Institutional Investors (FIIs) offloaded equities worth ₹4,788.29 crore in the capital markets on a net basis on Monday (March 3, 2025), according to exchange data.

On the global front, President Donald Trump said on Monday (March 3, 2025) that 25% taxes on imports from Mexico and Canada would start on Tuesday (March 4, 2025).

Mr. Trump said that the tariffs are to force Mexico and Canada to step up their fight against fentanyl trafficking and stop illegal immigration. He wants to eliminate the U.S.’ trade imbalances and push more factories to relocate in the United States.