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The Indian rupee, following last week’s relief rally, is expected to decline on Monday, weighed by the dip in the Chinese yuan and persisting worries over U.S. President Donald Trump’s trade policies.
The 1-month non-deliverable forward indicated that the rupee will open at near 86.30 to the U.S. dollar compared with Friday’s close at 86.2050.
The Indian currency climbed 0.5% last week, its best weekly performance in nearly one-and-a-half years, on relief that Trump did not impose tariffs immediately on taking office.
Last week, Trump talked of imposing tariffs on China, the European Union, Mexico and Canada. That he did not impose tariffs was a relief for Asian currencies.
“With Trump, we just do not know what to expect. While last week brought no concrete news on the tariffs, it could very well be different this week,” a currency trader at a bank said, referring to the incident with Colombia.
On Sunday, Trump said he would impose sweeping retaliatory measures on Colombia, including tariffs and sanctions, after the South American country turned away two U.S. military aircraft with migrants being deported.
The dollar index inched higher on Monday. The offshore Chinese yuan dropped to 7.2650 to the U.S. dollar.
