The Indian rupee was expected to begin trading on a weaker note on Wednesday, reflecting a broader trend of decline observed across most Asian currencies and equity markets. This downward momentum was reported to have been driven by renewed concerns surrounding the trade policies of U.S. President Donald Trump, particularly in light of his firm stance on not extending the July 9 deadline for ongoing trade negotiations.
According to market indicators, the 1-month non-deliverable forward for the Indian rupee had suggested an opening in the range of 85.62 to 85.64 against the U.S. dollar. This was a weaker level when compared to Tuesday’s closing rate of 85.52. Despite recent sessions showing relatively stable trading conditions, the rupee had been fluctuating within a well-defined range, bounded by key support near 85.90 to 86.00 on the downside and resistance close to 85.30 on the upside.
Market participants from major banking institutions were reported to have observed that both these support and resistance levels were proving difficult to breach decisively. It was indicated that a more significant directional move was likely to occur only after the July 9 trade negotiation deadline had passed. One currency trader was quoted as saying that the rupee was more susceptible to a downside breach below 86 rather than a breakout above 85.30, as current global developments continued to weigh on sentiment.
Across the broader Asian region, financial markets were seen struggling under the burden of increased trade uncertainty. The refusal by President Trump to extend the trade deal deadline and his expressed skepticism about reaching an agreement with Japan were said to have rattled investor confidence. In Japan, equity indices reportedly dropped by around 1%, while the Japanese yen also weakened against the U.S. dollar.
Risk-sensitive currencies across Asia were likewise pressured. Notably, the South Korean won, Malaysian ringgit, and Thai baht each experienced declines of approximately 0.3%. Meanwhile, the offshore Chinese yuan was reported to have weakened past the level of 7.1650 against the dollar. These currency movements were reflective of broader caution in the market, as investors braced for potential retaliatory or preemptive actions by the U.S. administration after the looming July deadline.
In a parallel development in the United States, comments made by Federal Reserve Chair Jerome Powell introduced a degree of uncertainty into expectations around future monetary policy. Powell reportedly did not dismiss the possibility of implementing an interest rate cut during the Federal Reserve’s upcoming meeting scheduled for July 29–30. However, he emphasized that any decision would be data-dependent, as the central bank continued to monitor economic indicators before altering its course.
Although Powell’s remarks were interpreted as only mildly negative for the dollar, some shifts in trader positioning were observed. Market participants were said to have slightly increased their expectations of a rate cut at the July policy meeting, though no firm consensus had yet emerged.
At the same time, attention in the U.S. had also been directed toward fiscal policy developments, particularly President Trump’s substantial tax-and-spending legislation. The bill, which had narrowly passed in the Senate, was expected to return to the House of Representatives for final approval. Investors were carefully assessing the bill’s long-term implications for the U.S. economy and its impact on fiscal discipline, with some concern about its potential contribution to the growing national debt.
In this mixed global environment, where geopolitical tensions and monetary policy uncertainties coexisted, the Indian rupee was expected to be influenced not only by local technical levels but also by the broader risk sentiment prevailing in global markets. While domestic economic fundamentals for India remained stable in the short term, external pressures—particularly those related to trade negotiations, the Fed’s policy path, and capital flows—were seen as significant variables likely to determine the rupee’s near-term trajectory.
With the rupee trading near a crucial inflection point and global sentiment teetering between caution and optimism, currency markets were being watched closely for signals that could either reinforce the rupee’s current range or push it toward a more pronounced move. Analysts noted that the balance of risks appeared tilted toward depreciation in the absence of a significant positive catalyst before the July 9 deadline.
