The Indian rupee is likely to weaken further on Tuesday, mirroring losses in the Chinese yuan after U.S. President Donald Trump issued fresh tariff threats against China.

The 1-month non-deliverable forward suggests the rupee will open between 85.90 and 85.92 per U.S. dollar, compared to 85.8350 in the previous session. On Monday, the rupee fell by 0.7%—its sharpest single-day drop in three months—amid a broader risk-off sentiment fueled by concerns that Trump’s tariff threats could dampen global growth and raise inflation.

A currency trader at a Mumbai-based bank noted that while the overall risk sentiment has improved slightly, the weakening yuan remains a concern for the rupee.

According to the trader, the rupee’s short-term direction—as well as that of other Asian currencies—now hinges entirely on how the tariff situation unfolds. If China allows the yuan to weaken further in order to offset the effects of U.S. tariffs, the Reserve Bank of India may also permit a steeper decline in the rupee.

Following Trump’s statement on Monday that he would impose an additional 50% tariff on U.S. imports from China by Wednesday unless Beijing rolls back the 34% duties it implemented last week, the offshore yuan slid past 7.36 per dollar—its lowest point in two months. China’s recent tariffs were a direct response to the reciprocal duties earlier announced by Trump.

As the trade war intensifies, investors are navigating a volatile environment. Risk assets are being sold off, safe-haven assets are in demand, and emerging market currencies—including the rupee—are under pressure.

Trump’s latest rhetoric indicates that market instability is likely to persist. “It remains to be seen how China will react to Trump’s remarks. However, signs—including a piece published in the People’s Daily—suggest that China is ready to weather the storm,” MUFG Bank said in a note.

Russia continues to count on U.S. President Donald Trump to broker an acceptable peace deal in Ukraine, though it remains prepared to prolong the war if negotiations falter, according to sources in Moscow familiar with the situation.

The Kremlin is unfazed by Trump’s threat to impose punitive secondary sanctions on Russian oil due to stalled ceasefire talks, the sources said. However, President Vladimir Putin sees Trump as his best chance to bring the war to an end and is committed to maintaining diplomatic engagement, they added, speaking on condition of anonymity.

Despite pledging a swift resolution to Europe’s most significant conflict since World War II, Trump recently expressed frustration over the slow progress of talks, stating he was “pissed off” with Putin. However, he later softened his stance, saying he believes the Russian leader will “fulfill his part of the deal.”

Kremlin spokesperson Dmitry Peskov, when asked for comment, stated that Russia would “prefer to continue mutual efforts to find a settlement,” acknowledging that diplomacy requires both time and effort. “Everyone would rather talk than fight—not just talk, but be heard. This is the reality with the current U.S. administration,” he said.

Meanwhile, Putin’s economic envoy, Kirill Dmitriev—who is sanctioned by the U.S.—revealed that he has been holding meetings in Washington with government officials. “Opponents of rapprochement fear that Russia and the U.S. might find common ground, leading to better mutual understanding and cooperation in both international affairs and the economy,” Dmitriev said on Thursday.

Moscow is holding out for additional concessions from Washington, including partial sanctions relief and a halt to arms deliveries to Ukraine. During last month’s U.S.-Russia talks in Saudi Arabia, a deal was struck to pause attacks on Black Sea shipping. However, Russia later made the agreement contingent on reconnecting one of its major state banks to the SWIFT global messaging system.

Trump aides, including his special envoy Steve Witkoff, had expressed optimism about progress in negotiations with Russia. The White House had originally aimed for a truce agreement by April 20, though that now appears unlikely. Additionally, discussions of a potential Trump-Putin summit have recently quieted.

On Monday, Russia announced the conscription of 160,000 men in its largest spring draft in 14 years, though the Defense Ministry claimed they would not be sent to Ukraine. Meanwhile, Moscow and Kyiv have traded accusations over violations of an agreed-upon pause in attacks on energy infrastructure, brokered by Trump.

Although Putin has voiced interest in striking a deal with Trump, he has remained firm on his key conditions. He insists that Ukraine must abandon its NATO membership aspirations, limit the size of its military, and recognize Russia’s control over occupied territories in eastern and southern Ukraine following the February 2022 invasion.

Ukraine and its European allies—as well as the Biden administration—view Russia’s demands as an attempt to subjugate its neighbor.

While Trump has already made several concessions to Moscow, fully accepting Putin’s terms could expose him to accusations of weakness. Still, ending the war remains one of his signature campaign promises.

Russia has attempted to entice Washington with economic cooperation, particularly in the Arctic and rare earth mining, as part of a broader strategy to rebuild relations. Additionally, Trump has been pressuring Ukraine to accept an economic partnership that would grant the U.S. control over future investments in the country’s infrastructure and natural resources.

Notably, Russia was one of the few nations excluded from Trump’s tariff announcement on Wednesday. Treasury Secretary Scott Bessent later clarified to Fox News that this was due to existing sanctions having already cut trade ties, though the U.S. did impose a 10% tariff on Ukraine.

“The Kremlin is seeking a direct meeting between Putin and Trump to negotiate an end to the war in Ukraine—on Trump’s terms—while securing provisions that would leave Ukraine permanently weakened,” wrote Alexander Gabuev, director of the Carnegie Russia Eurasia Center, in an analysis with colleagues from the organization. However, he added that Moscow “was prepared to continue fighting before Trump took office and remains ready to do so today.”

Despite Russia’s incremental territorial gains and superior manpower and firepower, Western analysts estimate that Moscow is suffering significant losses, exceeding 1,000 soldiers per day.

Meanwhile, a bipartisan group of 50 U.S. senators has introduced a new sanctions package proposing a 500% tariff on any nation purchasing Russian oil, natural gas, petroleum products, or uranium—should Putin refuse to engage in meaningful ceasefire negotiations or violate any future agreement.

Yet, the Kremlin remains defiant, believing that after three years of sanctions, it can withstand further economic pressure. “These new sanctions won’t be any more effective than the previous ones,” insisted sources familiar with Kremlin strategy.

“These measures will hurt other nations more than they will affect Russia, particularly those that rely on our oil and gas,” Anatoly Aksakov, head of the State Duma’s financial market committee, said in a phone interview. “That includes China, East Asia, and other developing economies.”

China’s President Xi Jinping and European Union leaders are set to visit Vietnam in the coming weeks amid intensified diplomatic engagements, as concerns grow over U.S. trade tariffs, officials said.

China, the EU, and Vietnam all maintain substantial trade surpluses with the United States and have faced tariffs imposed by Donald Trump’s administration, with additional measures expected to be announced on Wednesday.

Xi Jinping is scheduled to meet Vietnamese leaders in Hanoi on April 14, according to two Vietnamese officials familiar with the plans. This would mark his second visit to Vietnam in under 18 months. His multi-day trip to Vietnam is part of a broader Southeast Asian tour, including stops in Cambodia and Malaysia, two diplomats confirmed.

When asked about the visit, China’s foreign ministry stated it had no information to share, while Vietnam’s foreign affairs ministry did not respond to requests for comment.

Among the key topics on the agenda will be railway projects connecting northern Vietnam with China, which both countries have agreed to develop to enhance trade and connectivity, according to both Vietnamese sources.

One source noted that Xi’s visit comes amid “strategic adjustments by major countries,” highlighting shifts in U.S. policy under Trump as a significant factor. Additionally, Vietnam is in the process of approving the use of China’s COMAC aircraft, with an industry source suggesting that formal approval could coincide with Xi’s visit. This could open the door for Vietnamese airlines to lease or purchase Chinese commercial jets.

Just ahead of Xi’s visit, Spain’s Prime Minister Pedro Sanchez is set to meet Vietnamese leaders on April 9, followed by EU Trade Commissioner Maros Sefcovic, as per official schedules. Furthermore, French President Emmanuel Macron and European Commission President Ursula von der Leyen are also expected to visit Hanoi in the coming weeks, according to European officials and diplomats.

“The tide of tariffs and export controls is rising… We want to create new opportunities to trade and invest with trusted partners,” von der Leyen said in a video message to ASEAN leaders when they convened in Hanoi last month.