Indian rupee under pressure from soft Asia FX, fresh Donald Trump tariff warning
The Indian rupee is poised to open weaker on Tuesday, bogged down by the softness in Asian peers and U.S. President Donald Trump's tariff warning to countries doing business with Iran.
The 1-month non-deliverable forward indicated the rupee will open in the 90.22-90.26 range versus the U.S. dollar, having settled at 90.1525 on Monday.
On Monday, Trump said countries that do business with Iran would be hit with a 25% tariff on U.S. trade, with Washington assessing its response to widespread protests in Iran.
Top export destinations for Iranian goods include India and China.
There was no official documentation of the policy on the White House website, neither is there any information on whether it is aimed at all of Iran's trading partners.
India is already grappling with 50% U.S. tariff - among the steepest, a backdrop that has contributed to persistent pressure on the rupee.
The rupee is down about 0.3% so far this month, adding to 2025's nearly 5% decline, with traders saying that losses would likely have been larger if not for support from the Reserve Bank of India.
The broader bias on the rupee "remains heavy, and unless there's a meaningful shift in flows, it looks like (it's) only a matter of time before we probe past 91 and print a all-time low," a currency trader at a foreign bank said.
The rupee hit an all-time low of 91.0750 last month, before recovering on the back of RBI intervention.
The currency's Asian peers were mostly down on the day, with traders assessing the fallout of a criminal probe into Federal Reserve Chair Jerome Powell, a move analysts said threatens the central bank's independence and faith in U.S. assets.
KEY INDICATORS:
** Dollar index up at 98.97
** Brent crude futures up 0.2% at $64 per barrel
** Ten-year U.S. note yield at 4.18%
** As per NSDL data, foreign investors sold a net $409 million worth of Indian shares on January 9
** NSDL data shows foreign investors sold a net $14.2 million worth of Indian bonds on January 9
