Rupee Eyes Relief as Dollar Slips on Greenland Tariff Tensions
The Indian rupee, weighed down by persistent portfolio outflows, may see some near-term relief as the U.S. dollar retreated amid fresh geopolitical tensions involving Greenland. The one-month non-deliverable forward suggests the rupee could open between 90.70 and 90.74 per dollar, after sliding 0.6% on Friday to close at 90.8650, its sharpest daily fall in nearly two months.
The dollar weakened against major currencies after U.S. President Donald Trump threatened escalating tariffs on European allies unless the United States is allowed to buy Greenland. The announcement rattled markets, triggering a sell-off in the dollar and U.S. equity futures, while boosting the euro and other safe-haven assets. Analysts noted that rising policy uncertainty in the U.S., rather than tariff mechanics, has increasingly driven dollar weakness.
The rupee’s challenges persist, however, as foreign investors continue to pull money out of Indian assets and step up hedging amid depreciation fears. On Friday, the currency moved closer to its record low of 91.0750. Data showed foreign investors sold $389.7 million worth of Indian equities and $90.9 million in bonds on January 15, underscoring sustained capital outflow pressure.
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