The rupee is back on the discussion table, as it has crossed the Rs 90/$ mark. In this market, any change in the value over thresholds like 87, 88, 89, and 90 is significant because once crossed, they tend to remain benchmarks, and rarely do they get rolled back. Just what is happening in this market?

Let us look at the main triggers for this sentiment, which has turned quite negative. In general, one would expect the currency to move in the opposite direction to the dollar. The dollar has been weakening and will probably continue to do so as the Fed keeps lowering the interest rate. Most currencies have strengthened against the dollar, and the quick indicator here is the dollar index. As long as it is less than 100, the dollar is weaker in relative terms. In the past the rupee did strengthen when the dollar weakened. But not today.

The first trigger is the trade deal with the USA. The market is waiting to hear about the same. While it does look like it is on the anvil, there is no firm announcement on the same. This uncertainty is keeping the market jittery, as India faces one of the highest tariffs relative to other countries at 50%. It is another issue that any deal with the USA will necessarily mean some give and take, where there will be the contentious issue of agriculture and dairy that has to be sorted out in the form of imports from the USA.

The second has been the erratic........

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