The rupee opened at 71.83 against the dollar (Mint file)
The rupee opened at 71.83 against the dollar (Mint file)

Rupee weak as Saudi attack spurs demand for safe haven assets

  • The domestic currency ended at 71.79 a dollar, down 0.26% from its Monday's close of 71.60. The local currency opened at 71.83 and touched a low of 71.98
  • The yield on the 10-year Indian government bond ended at 6.732% compared with its previous close of 6.714%

Mumbai: The Indian rupee was weaker against the US dollar tracking emerging market currencies as the attack on Saudi Arabia’s oil facilities lifted demand for safe haven assets such as the greenback.

The domestic currency ended at 71.79 a dollar, down 0.26% from its Monday's close of 71.60. The local currency opened at 71.83 and touched a low of 71.98.

The yield on the 10-year Indian government bond ended at 6.732% compared with its previous close of 6.714%.

Traders will await the outcome of the US Federal Reserve’s policy meeting which will start on Wednesday. The central bank is poised to cut interest rates for the second time this year as policymakers try to get ahead of economic risks emanating from a global slowdown and US President Donald Trump’s trade war.

The benchmark equity index Sensex was down 1.73% at 36481.09 points. So far this year, the index has risen 1%.

In the year so far, the rupee has weakened 3%, while foreign investors have bought nearly $6.79 billion in Indian equities and $4.65 billion in debt.

Asian currencies were trading lower. South Korean won was down 0.6%, Indonesian rupiah fell 0.5%, Malaysian ringgit, China Offshore 0.3% and China renminbi declined 0.3% each, Philippines peso lost 0.2%, and Taiwan dollar, Thai Baht and Singapore dollar fell around 0.1% each,.

The dollar index, which measures the US currency’s strength against a basket of major currencies, was at 98.60, down marginally from its previous close of 98.61.

(Bloomberg contributed this story)

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