The Indian rupee (INR) today rebounded after falling beyond 70 a US dollar. At day's low, the rupee fell 70.06 as US-China trade war hit emerging market currencies. US today increased tariff to 25% on $200 billion worth of Chinese good as the two sides pursue last-ditch talks to try salvaging a trade deal. China's Commerce Ministry said it "deeply regrets" the US decision, adding that it would take necessary countermeasures, without elaborating. Rupee later pared losses and traded ended higher at 69.91 as compared to Thursday's close of 69.94.
5 things to know about INR vs USD rate today:
1) Indian domestic stock markets have struggled over the past few sessions as US-China trade tensions rocked global financial markets. Rupee has been hurt amid selling of domestic equities by foreign institutional investors. FIIs sold equity worth ₹655 crore on Thursday, extending outflows to the fifth day.
2) “Global trade tensions surrounding US and China continued to rattle the Indian currency markets. Weakness in domestic equities and election outcome uncertainty weighted down in the forex markets," said Geojit Financial Services in a note.
3) Rupee has support at 70.48 and if this level is breached, it could fall to 70.84 a dollar, Geojit Financial Services added.
4) Exporters are advised to use this weakness in rupee to cover near-term exposures to reduce risk ahead of general election result, says IFA Global in a note. Importers are advised to hold with a stop above 70.45, it added.
5) Higher tariffs will not be applicable to goods already in transit but to fresh exports from China, US said. Many analysts say that this window gives the US and China some time to get a deal in place.