Again, the Indian rupee obtained a small win, rising by only 1 paise from yesterday to 85.62 against 1 US dollar. Even though stocks managed to edge higher, investors are on edge until the ongoing US-China trade talks make progress. Even though the rupee began well, its progress slowed down due to the US dollar’s rise in value.
The dollar index went up by 0.17%, standing at 99.10. Still, US President Trump said the trade talks were going well and fulfilled most of his requirements, despite expecting the process would be tough.
Analysts expect India’s currency (rupee) to fall behind that of other Asian countries because it suffers from an external deficit when the US dollar is weaker. In comparison, this year the Singapore dollar, Korean won, and Taiwan dollar have climbed 6% to 9.5%, but the rupee has remained at nearly the same level.
RBI’s choice to cut official rates by 50 basis points and the cash reserve ratio by 100 basis points to 3% is likely to have an effect on the rupee.
The prices of Brent and WTI crude went up by 0.16% and 0.15%, to $67.15 and $65.39 per barrel, respectively. The increase in prices is mainly caused by investors’ concern about the US-China trade situation.
Market Insights:
- Trading activity in rupees indicates they’ll be held between 85.45 and 85.95.
- Prices for Brent crude have partially improved, but they are still down almost 9% this year because of disputes and modifications made by OPEC+.
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