Rupee Drops to 86.36 Against Dollar Amid Negative Market Trends and US Trade Talks Uncertainty

The Indian rupee fell 20 paise to 86.36 against the US dollar in early trade on July 21, 2025, weighed down by the US dollar's strength in the overseas market and a negative trend in domestic equities. The rupee extended its slide with the breach of the key 86.00 level, and the dollar index fell 0.02% to 98.46. Forex traders expect the rupee to move between 85.90 to 86.40 with a downward bias. The outcome of India-US trade talks will be crucial for the rupee's performance, with potential tariffs on Indian exports set to expire on August 1.

The Indian rupee continued its downward trend, depreciating by 20 paise to 86.36 against the US dollar in early trade on July 21, 2025. The weakening of the rupee was primarily driven by the strengthening of the US dollar in the overseas market and a negative trend in domestic equities. The dollar index fell by 0.02% to 98.46, exerting further downward pressure on the rupee [2].

Analysts expect the rupee to move within the range of 85.90 to 86.40, with a downward bias, as the outcome of India-US trade talks remains uncertain. The potential expiration of tariffs on Indian exports on August 1 is likely to influence the rupee's performance [2].

The rupee has shown weakness in 2025, with the average exchange rate for the year being 0.01162 US dollars per Indian rupee. The highest exchange rate in 2025 was 0.01187 US dollars per Indian rupee on May 5, while the lowest was 0.01139 US dollars per Indian rupee on February 7 [1].

The Indian rupee has witnessed over 0.8% depreciation in the current calendar year and has declined nearly 1% over the past two weeks. Traders remain focused on the potential tariff deal with the US and the possibility of domestic rate cuts in India [2].

The USD to INR forecast for July 2025 indicates a beginning rate of 85.69 rupees, with a high exchange rate of 87.92 and a low of 84.98. The average for the month is 86.28, and the forecast at the end of the month is 86.54, with a change of 1.0% [3].

The Indian rupee's performance will continue to be influenced by global economic factors, trade negotiations, and domestic economic indicators. Investors and financial professionals should closely monitor these developments to make informed decisions.

References:
[1] https://www.exchange-rates.org/exchange-rate-history/inr-usd-2025-07-18
[2] https://www.business-standard.com/markets/news/rupee-opens-lower-at-86-22-per-dollar-tracking-asian-peers-and-firm-dollar-125072100140_1.html
[3] https://longforecast.com/usd-to-inr-forecast-2017-2018-2019-2020-2021-indian-rupee