- The Indian Rupee declines in value during the initial hours of European trading on Friday.
- Increased global political instability following the incident in Kashmir could negatively impact the INR.
- Potential progress in trade discussions and sustained foreign investment could limit the pair’s potential for further losses.
The Indian Rupee (INR) is weaker on Friday, facing downward pressure from a resurgence in US Dollar (USD) buying interest. Increased geopolitical concerns stemming from the terrorist incident in Pahalgam, Jammu & Kashmir are also contributing to the Indian currency’s decline.
However, positive sentiment regarding ongoing US-India trade negotiations may offer some resilience to the Indian currency. Currently, the 26% retaliatory tariff imposed by the US on India is temporarily suspended for 90 days. This pause is scheduled to end on July 8th. India is also subject to a 10% tariff, consistent with US trade policy applied to other countries. In addition, increasing inflows from Foreign Institutional Investors (FII) may bolster the INR’s upward potential. Market participants will be closely monitoring the final US Michigan Consumer Sentiment data due later today.
