Forex News: Indian Rupee Falls After Trump's 25% Tariffs Threat

Indian Rupee Falls After Trump's 25% Tariffs Threat In India

(RTTNews) - The Indian rupee weakened against the U.S. dollar in the Asian session on Thursday, as the United States threatens to impose 25 percent tariffs and penalties on imports from India.

U.S. President Donald Trump has issued a warning of 25 percent tariffs on imports from India, in addition to an undisclosed penalty for purchasing oil and military supplies from Russia.

On Wednesday, Trump announced the tariff rate for India, set to take effect on August 1. In his message, Trump referred to India as a friend but expressed criticism towards the country for procuring defense equipment and energy products from Russia during its ongoing conflict with Ukraine, as well as for imposing the highest tariffs on the United States compared to its other major trading partners.

Asian stock markets traded lower after the Federal Reserve's interest-rate decision, tech earnings, U.S. President Donald Trump's tariff threats and China data in focus.

Traders remain cautious ahead of the final deadline of August 1 set by the Trump for reaching trade deals with its trading partner countries. Trump hinted at higher tariffs on certain countries after the deadline.

The US Fed announced its widely expected decision to leave interest rates unchanged in a divided vote. The decision to leave rates unchanged was not unanimous as Fed Governors Michelle Bowman and Christopher Waller preferred to lower rates by a quarter percentage point.

During his post-meeting press conference, Fed Chair Jerome Powell said the central bank has not made a decision about lowering rates in September. "We don't do that in advance," Powell said. "We'll be taking that information into consideration and all the other information we get as we make our decision."

On Wednesday, the rupee fell to nearly a 6-month low of 87.846 against the greenback.

Against the U.S. dollar, the rupee fell to 87.804 from yesterday's closing value of 87.691.

Looking ahead, the German flash CPI data for July, Canada GDP data for June, average weekly earnings data for May, U.S. core PCE price index for June, personal income and spending data for June, employment cost data for the second quarter, weekly jobless claims data and U.S. Chicago PMI data for July are slated for release in the New York session.

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