It was also the rupee’s biggest single-day drop since September 23, LSEG data showed. The rupee opened at 87.86/$1 compared with its previous close of 87.84/$1 and traded in the range of 87.85 and 88.30, drifting weaker in the second half of the day.
“Incoming news on the possibility of reduced tariffs on India helped the rupee gain in the beginning, but dollar buying took over later,” said a currency trader from a state-run bank. “RBI was present during the day, but the strong intervention seen last week did not seem to be there.”
Market participants are keeping a close watch on the trade deal with the US, which would influence the rupee’s near-term trajectory.
“For now, 88.30/$1 should act as a resistance for the dollar. Continued uncertainty around US-India trade relations and global risk appetite are setting the broader tone for the rupee,” said Anil Bhansali, head of treasury at Finrex Treasury Advisors.
Bhansali expects the rupee to trade in the range of 87.80 to 88.30 a dollar on Tuesday.