Rupee falls 18 paise against dollar due to rising trade tensions

Mumbai, PTI | Updated : 06 May 2019, 06:29 PM
Rupee falls against USD Dollar (Representational Image)
Rupee falls against USD Dollar (Representational Image)

The rupee on Monday fell by 18 paise to close at 69.40 against the US dollar as renewed trade war worries following US President Donald Trump's threat to raise tariffs on Chinese imports sent markets into a tailspin and triggered flight of capital to safe bets. Foreign investors were net sellers in capital markets Monday selling assets worth Rs 948 crore on a net basis, provisional exchange data showed.

Forex dealers said that Trump's comment that he would raise taxes on USD 200 billion of Chinese products to 25 per cent from 10 per cent from Friday affected investor sentiment in the currency market.   

Gold and Japanese yen, considered as safe haven investment in times of crisis, gained Monday while Chinese currency yuan fell to the year's low level against the dollar. Other currencies such as the Turkish lira, the Mexican peso, and the Australian dollar declined up to 0.5 per cent on trade worries.

The rupee opened weak at 69.38 and fell further to the day's low of 69.46 at interbank forex market. The local currency, however, pared losses to close at 69.40, down 18 paise from the previous close. The rupee had strengthened by 15 paise to close at 69.22 against the US dollar on Friday.

Crumbling domestic equity markets also impacted the trading pattern in the forex market, dealers added. The BSE Sensex on Monday cracked over 362.92 points in line with global sell-offs amid renewed fears that trade negotiations between the US and China are on the verge of collapse.

Similarly, the NSE Nifty dived 114 points to settle below the 11,600-level.  Meanwhile, the Dollar Index which gauges the greenback's strength against a basket of six currencies, rose 0.05 per cent to 97.57.

Brent crude futures, the global oil benchmark, fell 0.40 per cent to trade at USD 70.57 per barrel on fears that the trade war between the US and China could impact the demand for crude oil.

Meanwhile, Financial Benchmark India Private Ltd (FBIL) set the reference rate for the rupee/dollar at 69.3558 and for rupee/euro at 77.6360. The reference rate for rupee/British pound was fixed at 90.9980 and for rupee/100 Japanese yen at 62.62.

First Published: Monday, May 06, 2019 06:23 PM
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