By Jaspreet Kalra
MUMBAI(Reuters) – The Indian rupee ended little changed on Thursday, as traders steered clear of aggressive directional bets on the currency, while routine dollar demand from importers blunted positive cues from an uptick in Asian peers.
The South Asian currency has largely settled between 85 and 86 over the last two weeks, amid muted foreign portfolio flows and as traders await cues from ongoing U.S.-India trade.
On the day, the rupee settled at 85.6350, barely changed from its previous close at 85.6725.
Asian currencies were a tad higher on the day, while the dollar index treaded water around the 97.5 mark.
As tariff threats continue to roll out of the U.S., investor sensitivity to policy changes appears to have reduced, with many wagering that the extended reciprocal tariff deadline gives countries room to negotiate.
“If by then (August 1) trade negotiations with large U.S. partners aren’t at an advanced stage, it will be harder to ignore the higher U.S. tariff rate,” ING said in a note.
“A gradual implementation of sector-specific tariffs should do much less damage to the dollar compared to sudden, ‘Liberation Day’-style measures,” the note added.
India is also engaged in trade negotiations with the U.S. and is among the few large U.S. trading partners that have not yet received a letter from the White House declaring a reciprocal tariff rate.
A delegation from India is expected to visit the United States soon for trade talks, a government official told reporters, as the two countries look to iron out disagreements over duties for auto components, steel and farm goods.
(Reporting by Jaspreet Kalra; Editing by Vijay Kishore)
