Indian rupee drops against UAE dirham amid Trump's new tariff announcement

The Indian rupee weakened against the US dollar on Thursday after US President Donald Trump announced new tariffs on all countries. The rupee opened at 85.75 (Dh23.36) against the US dollar.

Trump imposed 26 per cent tariffs on imports from India effective from April 9, a component of his comprehensive plan to place duties on all U.S. imports.

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If the "extent of the damage" on the rupee is "only" this much then it "will happily take it", a currency trader at a Mumbai-based bank said.

"I would have expected a bigger up move (on dollar/rupee), past the 86 level," the trader said.

Trump announced a 10 per cent baseline tariff on all imports from April 5 and higher duties on certain other countries including 34 per cent on China and 20 per cent on the European Union.

"The average tariff rate appears higher than expected," ING Bank said in a note.

"The worst-hit region by this tariff announcement is undoubtedly Asian EM," ING said, adding that Vietnam, Korea, India, Indonesia and Thailand will be subject to extra tariffs in the area of 25 per cent to 45 per cent.

The offshore Chinese yuan dropped to a one-month low of 7.3482 versus the US dollar, before recovering marginally to a current rate of 7.32.

US equity futures experienced a near 3 per cent decline and Japanese equities registered similar losses. Indian equities were also set for a weak open.

US Treasury yields dropped amid worries over how the tariffs will impact growth for the world's biggest economy.