Mumbai: Mumbai: The Indian rupee on Wednesday closed lower against the US dollar as investors turned cautious on emerging market assets after a new twist in US-China relations.

The rupee closed at 71.44 a dollar today compared with Tuesday's close of 71.54. The Indian unit had opened at 71.57 a dollar.

Investors turned cautious, eyeing developments on the US-China trade deal after Beijing threatened retaliation if Washington enacts the Hong Kong Bill that would require an annual review of whether the city is sufficiently autonomous to justify its special trading status.

Back home, the yield on the 10-year Indian government bond settled at 6.466% compared with its previous close of 6.494%.

The benchmark Sensex rose 0.24% or 92.90 points to close at 38598.99. So far this year, the index has gained 7.02%.

In the year so far, the rupee has weakened 2.48%, while foreign investors have bought nearly $8.29 billion in Indian equities and $4 billion in debt during the period.

Most other Asian currencies were also subdued today. The China Offshore was down 0.29%, China renminbi 0.25%, South Korean won 0.22%, Singapore dollar 0.15%, Taiwan dollar 0.11%, Indonesian rupiah 0.42%, Malaysian ringgit and Hong Kong dollar were a tad down. However, safe haven Japanese yen rose 0.18%.

The dollar index, which measures the US currency’s strength against a basket of major currencies, was at 98.343, up 0.06% from its previous close of 98.288.

(Bloomberg contributed this story)