Indian Rupee settled Wednesday close to a one-month low by falling 5 paise to 86.42 against the US dollar, according to reports. This represents the waning of the local currency by almost 0.94 per cent as of now in the current calendar year. The rupee that had briefly managed to recover to 86.22 in the last session broke down once again and hit a high of 86.41 before settling at its lowest level in almost a month.
This rupee loss occurred during a period of global volatility in currencies that has been caused by recent turn of events of the trade involving the United States. The US president, Donald Trump, declared a new trade protocol making Japanese exports to the US pay a 15 per cent tariff. Besides, there was a deal signed with the Philippines by the Trump administration, bringing about a 19 per cent tariff on their exports. All this caused positive sentiments on Asian equity and currency markets, although the rupee did not get the advantage and it was under pressure.
At the same time, the dollar index that compares the greenback with six major currencies slipped by 0.1 per cent to 97.39, further contributing to the weakness of the rupee. Domestically, FPIs sold stocks again on the second straight day, selling a value of 3,548.92 crores. Equity outflows have hit a total of 5,826 crores in July, further straining the currency.
In commodities, prices of crude oil were stable at a relatively high level boosted by optimism on the US-Japan trade deal, and the reduction of the US crude oil inventories. Brent crude declined 0.45 per cent to touch $68.28 per barrel and WTI crude fell 0.47 per cent to reach a figure of $65.00 as of 3.35 PM IST. The analysts believe that the rupee would continue to trade within a narrow range in the short term due to world trade developments and ebbs and flows of foreign funds.
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