On Tuesday, the Indian Rupee had the second consecutive session and it regained its lost strength after starting the day at a loss due to regained hope in the proposed India-US trade deal and the reduction in the price of crude oil. Domestic currency ended 3 paise above 88.61 against US dollar as reported in the market. Although this is momentary recovery, Rupee continues to be among the worst performing currencies in Asia this year, and it has already dropped by 3.50 percent. But this month it has recorded a slight growth of 0.14%.
The markets were also boosted in reaction to news that reported that the initial stage of the India-US trade agreement is almost complete. As per reports, the two countries are in negotiations that are at the last levels. To its credit, US President Donald Trump recently wrote that Washington and New Delhi were very much near a fair trade agreement and possibly that tariffs imposed on the Indian goods would be dropped in the long run.
With such prospects on the trade front, India is under immense economic strain due to its increasing trade gap. The merchandise trade deficit of the country had hit an all time high of 41.68 billion in October and this was fuelled by the threefold rise in gold imports. Meanwhile, exports declined drastically by 11.8per cent to $34.38 billion which is the lowest in 11 months. Imports on the other hand were also up 16.66% at 76.06 billion, the highest in history.
In the global market, the US Dollar index that tracks the greenback against six major currencies dropped by 0.06 percent to 99.52 which gave extra strength to the Rupee.
Crude oil prices in the commodities market decreased as a result of anxieties about geo-political tensions and uncertainties about the supply of the commodity globally. Brent crude and WTI crude fell 0.44% to $63.92 per barrel and 0.42% to $59.68 per barrel respectively, as at 3:25PM IST.
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