The Indian rupee plummeted to a fresh 16 month low against the dollar in early trades on Tuesday, 15 May 2018 amid gains in the US currency overseas. Dollar strengthened against major global currencies having pulled up from its lowest level in more than a week as hopes for easing global trade tensions pushed US bond yields higher. Early losses in stock markets and demand for the US currency from importers also weighed on the local unit.
The rupee declined by 28 paise to a fresh 16-month low of 67.79 against the dollar in early trade today. Rupee rolled back some of the losses to hit an intra-day high of 67.5250 and was last seen trading at 67.6350 in the spot currency market. Yesterday, the rupee had lost 18 paise to end at a fresh 16-month low of 67.51 against the US currency on heavy dollar purchases and sustained fund outflows from equities.
Domestic stocks began trading for the day on a firm note as initial trends showed BJP taking huge lead in Karnataka. At 9:28 IST, the barometer index, the S&P BSE Sensex, was up 221.22 points or 0.62% at 35,777.93. The Nifty 50 index was up 60.90 points or 0.56% at 10,867.50. Overseas, Asian stocks fell as investors remained cautious about key economic and political risks, while supply concerns kept crude oil prices near 3-1/2-year highs. US stock indexes posted modest gains yesterday, 14 May 2018 and the Dow ended with an eighth gain in a row, extending an uptrend on signs of easing trade tensions between the US and China.
Meanwhile, the dollar dropped slightly against the other major currencies on Tuesday morning in Asia. Despite the drop in early morning in Asia, the dollar was firmer overnight as it was supported by U.S. 10-Year yields that climbed up to 3% again this year. The U.S. dollar index that tracks the greenback against a basket of six major currencies last stood at 92.52, down 0.03%.