BackRupee opens tad higher; Asian currencies trade mixed
At 9.50am, the rupee was at 70.43 a dollar, up 0.37% from its Monday's close of 70.74The rupee on Monday fell the most in six years
PremiumMUMBAI : The Indian rupee on Tuesday rebounded from its 11-week low against the US dollar. Other Asian currencies trade mixed as China took steps to stabilized the yuan after the US tagged it as a currency manipulator.
At 9.50am, the rupee was at 70.43 a dollar, up 0.37% from its Monday's close of 70.74. The domestic currency had opened at 70.83 and has so far touched a high and a low of 70.67 and 70.84 a dollar, respectively. So far this year, the unit has declined 1.2%.
Global markets rout eased after China fixed the currency stronger than expected onshore. The announcement of the daily reference rate, which was stronger than the psychologically important 7 per dollar level, helped ease the turmoil in markets as the yuan gained.
The rupee on Monday fell the most in six years after the government scrapped Article 370 of the Constitution that granted special status to Jammu and Kashmir, with an order saying “it shall come into force at once". The abrogation follows the Centre introducing the Jammu and Kashmir Reorganization Bill in Parliament.
The fall in the rupee was aggravated after the yuan fell beyond 7 per dollar for the first time since 2008 after President Donald Trump abruptly announced fresh tariffs on imports from China, escalating the trade war between the two countries. Beijing has pledged to respond if the US goes ahead with a plan to impose a 10% tariff on a further $300 billion in Chinese imports.
"I believe that the risk-off mood will continue to stay for some time now. We see the currency at 71.30 before the month end. While, on the downside 69.85 will continue to act as a strong support. Meanwhile, this week is the RBI (Reserve Bank of India) policy. Widely, RBI is expected to cut rates further by 25bps and continue to hold the accommodative stance which will weigh on rupee", said Rahul Gupta, currency research head, Emkay Global Financial Services Limited.
The benchmark Sensex Index fell 0.31% to 36584.77 points, while the 10-year government bond yield was at 6.365% compared with its previous close of 6.392%.
Among Asian currencies, China Offshore was up 0.27%, Taiwan dollar 0.22%, Singapore dollar 0.17%, Thai Baht 0.14%, South Korean won 0.11%. However, Indonesian rupiah was down 0.43%, Malaysian ringgit 0.3%, Philippines peso 0.24%, Japanese yen 0.23%.
The dollar index, which measures the US currency’s strength against a basket of major currencies, was at 97.376, down 0.15% from its previous close of 97.522.
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