- The Indian Rupee extends its gains during Friday’s trading session in Asia.
- Favorable progress in trade discussions and sustained foreign investment are bolstering the INR.
- Increased geopolitical instability following the Kashmir incident could limit the pair’s potential gains.
The Indian Rupee (INR) is gaining ground on Friday. The positive sentiment surrounding trade negotiations between the US and India is offering some tailwind to the Indian currency. At present, the 26% retaliatory tariff imposed by the US on India is temporarily suspended for 90 days. This pause is set to conclude on July 8. However, India is still subject to a 10% tariff, consistent with US trade policy applied to other countries. In addition, increasing inflows from Foreign Institutional Investors (FII) may further propel the INR’s appreciation.
However, growing geopolitical unease in the wake of a terrorist attack in Pahalgam, Jammu and Kashmir, could exert downward pressure on the Indian currency. Market participants will be closely monitoring the final release of the US Michigan Consumer Sentiment data later today.
