The Indian rupee opened 22 paise lower on April 2, trading at 85.68 against the US dollar, as markets braced for US President Donald Trump’s upcoming trade tariff announcement. This marks a slight dip from the previous day’s close of 85.46 against the greenback, and the currency fluctuated between 85.68 and 85.72 during early trading hours.
All eyes are on Trump as he prepares to reveal his new set of tariffs during an event in the White House Rose Garden. The President has kept both his rivals and allies guessing, leaving uncertainty about who will be targeted and the extent of the tariffs. Trump, however, has assured the public that his approach will be “very kind” on what he has dubbed “Liberation Day,” which is scheduled for Wednesday.
This uncertainty surrounding the trade announcement has fueled fears of an escalating trade war, with concerns growing about its potential to tip the global economy into recession, particularly in the US. Trump’s pledge to impose reciprocal tariffs on countries that levy duties on US exports has added to market jitters, as investors worry about further economic fallout.
Adding to the volatility, Amit Pabari, managing director at CR Forex Advisors, highlighted that Trump had recently warned of imposing secondary tariffs on countries purchasing Russian oil if Moscow continues to obstruct efforts to end the ongoing war in Ukraine. This geopolitical tension has contributed to a rise in Brent crude oil prices, further complicating the global economic landscape.
Despite these challenges, the Indian rupee showed signs of recovery in March, performing better than many of its Asian counterparts. As markets await Trump’s announcement, all eyes will be on how the currency and global markets react in the days to come.