Indian Rupee: Loses momentum as dollar regains strength

The Indian rupee lost ground in opening trades on Tuesday tracking strength in dollar overseas. Dollar regained some strength in early Asia from a near one-week low that is weighing on the counter. Data from US overnight showed that US manufacturing activity contracted more than expected in May. ISM said its manufacturing PMI slipped to 48.5 in May from 48.7 in April, with a reading below 50 indicating contraction. With the unexpected decline, the manufacturing PMI dipped to its lowest level hitting 48.4 in November 2024. Meanwhile, Fed Powell in his speech yesterday failed to comment on the US economic outlook amid market uncertainty due to Trump tariffs. Rupee opened at Rs 85.55 per dollar and recovered to a high of 85.51 so far during the day. On Monday, INR appreciated 16 paise to settle at 85.39 against the US dollar. RBI's Monetary Policy Committee (MPC) will begin the deliberations on its next bi-monthly policy on June 4 and the outcome is scheduled to be announced on June 6.

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