Rupee drops to 85.67 in early trade: Here’s what pulled it down today

The Indian rupee weakened by 22 paise to 85.67 against the US dollar on Thursday (April 24), as rising geopolitical tensions and strong global demand for the dollar weighed on sentiment.

Traders said the terror attack in Pahalgam, Jammu & Kashmir, which killed 26 civilians, triggered risk aversion among investors.

India responded by downgrading diplomatic ties with Pakistan and halting the Indus Water Treaty and land transit at Attari.

"Events like these initially drag the rupee due to panic selling. Past instances—Uri in 2016, Pulwama in 2019—showed similar trends, but the rupee rebounded once India responded decisively," said Amit Pabari, MD, CR Forex Advisors.

The rupee opened at 85.60 and hit a low of 85.67 in early trade, down from Wednesday’s (April 23's) close of 85.45. This marked its second straight session of decline after dropping 26 paise on Wednesday (April 23).

Globally, the US dollar is gaining ground. The dollar index, which measures the greenback against a basket of six major currencies, is inching closer to the key 100-mark. It rose from a recent low of 97.92 to near 99.94 on hopes of easing US-China trade tensions and clarity on US Federal Reserve policy.

“The dollar has found support from talk of tariff rollbacks on Chinese goods and a softer tone from the White House on Fed independence,” ING Bank noted.

Analysts also pointed to technical levels.

“The rupee could face resistance at 85.50. If that breaks, 85.80 is likely. Support remains around 85.20,” Pabari added.

Despite strong FII inflows into Indian equities—₹3,332 crore on Wednesday (April 23)—the rupee couldn’t hold firm, as bond markets saw net outflows and broader risk sentiment turned cautious.

Brent crude prices, meanwhile, hovered near $66.10 per barrel, offering little relief on the import cost front.