The Indian rupee weakened at the start of the week, pushing USD/INR to near 90.50, its highest level in almost two weeks.
The move followed renewed tariff threats from US President Donald Trump targeting Indian imports.
We could raise tariffs on India if they don't have help on Russian oil issue.
Donald Trump said.
Trump added that tariffs could be increased quickly, reviving trade tensions between Washington and New Delhi.
The US had already raised import duties on India to 50% in 2025, including penalties linked to Russian oil purchases.
Strong US dollar demand from Indian importers and foreign fund outflows added pressure on the rupee.
Foreign institutional investors remained net sellers in early January after heavy equity outflows in 2025.
The US dollar also gained support from rising geopolitical risks following US military action in Venezuela.
Safe-haven demand lifted the dollar as investors reacted to heightened uncertainty across global markets.
Analysts expect continued volatility ahead of key US economic data, including jobs and manufacturing reports.