USD/INR surges as US doubles tariffs on Indian imports to 50%
USD/INR strengthened 1.2% to 84.50 as the US administration's punitive 50% tariffs on Indian exports took effect at midnight, adding 25% on top of existing duties. The move targets India's purchase of Russian oil and affects key export sectors including textiles, jewelry, footwear, furniture, and chemicals worth approximately $6.3 billion annually. The rupee faced immediate selling pressure as traders anticipate reduced export earnings and potential trade balance deterioration. India's trade deficit could widen by 15-20% if retaliatory measures escalate. Technical indicators show USD/INR breaking above the 84.20 resistance level with momentum indicators turning bullish. The next resistance sits at 84.75, while support has formed at 84.00. Traders should monitor India's response and any potential currency intervention by the Reserve Bank of India to defend the rupee.
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