Indian Rupee: Plummets On Fresh Dollar Demand; Weak Equities

The Indian rupee weakened against the dollar in early trades on Friday, 18 May 2018 on fresh demand for the greenback from importers and banks. Crude oils breach of the USD 80 per barrel-mark in global market and a lower opening of the domestic equity market too weighed on the investor sentiment here. Increased demand for the US currency from importers and foreign fund outflows. However, dollars weakness against some currencies overseas capped some of the losses.

The local currency opened at Rs 67.78 against the dollar and plummeted to a low of 67.8850 so far during the day. In the spot currency market, the Indian unit was last seen trading at 67.8650. Yesterday, the rupee had managed to hold its ground against the US currency, gaining by 10 paise to end at 67.70 per dollar.

Domestic stocks drifted lower in early trade. At 9:18 IST, the barometer index, the S&P BSE Sensex, was down 75.38 points or 0.21% at 35,073.74. The Nifty 50 index was down 23.60 points or 0.22% at 10,659.10. Overseas, most Asian stocks were trading higher as investors appeared to be readjusting their expectations about trade negotiations between the US and China. As high-level meetings between the worlds two largest economies were being conducted in Washington, President Donald Trump kept expectations low, reportedly saying that China had become spoiled and that he doubted negotiations would be successful.

Meanwhile, the dollar hovered near five-month highs well above the 93 level in Asia on Friday morning, after climbing to this years fresh high at 93.46 overnight. The U.S. dollar index that tracks the greenback against a basket of six major currencies last stood at 93.38.