Delayed US-India Trade Deal Sinks Rupee, Dents Sentiment: Kotak's Banerjee

• The prolonged delay in the US-India trade deal is a key sentiment drag on the rupee, says Anindya Banerjee of Kotak Securities.
• Rupee's weakness stems from a combination of capital flows, domestic sentiment, and global macro developments.
• Despite strong export data, market disappointment over the stalled trade agreement adds to investor caution and risk aversion.
• Global factors like rising US bond yields and potential yen carry trade unwind are also pressuring emerging market currencies.
• Banerjee notes the rupee's current underperformance is unusually pronounced compared to historical episodes since 2013.

Why It Matters: Delayed US-India trade deal and global volatility are pressuring the rupee, impacting market sentiment.