Rupee Depreciates by 5 Paise Against the Dollar in Early Trade Today

Friday, August 8, 2025:The Indian rupee fell by 5 paise to 87.63 against the US dollar in early trade on Friday. The slip was mainly due to foreign investors continuously selling off their holdings and ongoing trade tensions with the United States.

What’s Ahead: Insights For Investors

• Rupee likely to stay under pressure: As long as foreign investors keep selling and trade tensions with the US continue, the rupee may remain weak in the short term.
• Watch RBI moves: The Reserve Bank of India is trying to protect the rupee from falling too sharply. If they keep intervening, it could limit further declines.
• Volatility expected: With no clear signs of progress on US-India trade talks, markets could stay nervous. Investors should be ready for short-term ups and downs in currency and stock markets.
• Global cues matter: If crude oil prices remain low and the US dollar weakens further, it could help the rupee and ease import-related worries for India.
• Impact on import/export sectors: A weaker rupee could benefit exporters (like IT and pharma companies), but increase costs for importers (such as auto and oil-related firms).
• Key level to watch: If the rupee falls below 87.20, it may signal a shift in the trend. Investors and traders should monitor closely.

Key Factors:

Narrow Range Trading

At the interbank foreign exchange market, the rupee started the day at 87.56 and traded as low as 87.63. This is a drop from its previous close of 87.58. Despite the pressure, the Reserve Bank of India (RBI) appeared to be intervening around the 87.95 level to prevent the currency from falling too much. For today’s trading, immediate support for the rupee is at 87.20, and resistance is near 87.70. A move below the support level could indicate a change in the current trend.

Global Signals and Market Reaction

The US dollar index, which measures the dollar’s value against other major currencies, eased slightly by 0.27% to 98.13. This offered a bit of relief for the rupee. Additionally, Brent crude oil futures slipped by 0.17% to USD 66.32 per barrel, which is good news for India’s import costs. However, domestic stock markets saw a decline in early trade, with the Sensex falling by 242.24 points and the Nifty dropping by 54.85 points. Foreign institutional investors also sold shares worth a net ₹4,997.19 crore on Thursday, adding pressure on the rupee.

Tariff Tensions Escalate

The main reason for the market’s cautious mood is the growing trade dispute with the US. President Donald Trump has stated that there will be no trade talks with India until the current tariff issues are sorted out. Washington has already imposed a 25% reciprocal tariff on Indian imports, which took effect on August 7. Furthermore, Trump signed an executive order to add another 25% levy on Indian goods in response to India’s purchase of Russian oil. This will bring the total tariff to 50%, making it among the highest the US has imposed on any nation. The additional duty will be enforced starting on August 27.

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