Indian Rupee: Plummets In Early Trades

The Indian rupee plummeted against the dollar in early trades on Friday, 15 June 2018 following strong demand for the greenback amid sustained foreign capital outflows. The dollar strengthened against other currencies overseas as the European Central Bank (ECB) pledged to leave interest rates unchanged until mid-2019.

The domestic unit commenced lower at Rs 67.89 against the dollar and plunged by 36 paise to hit a three-week low of 67.98 so far during the day. In the spot currency market, the Indian unit was last seen trading at 67.93. Yesterday, the rupee had gained 3 paise to end at 67.62 against the US currency, cutting short its two-day decline.

A bout of volatility was seen in early trade as the key benchmark indices reversed initial losses. At 9:28 IST, the barometer index, the S&P BSE Sensex, was up 33.22 points or 0.09% at 35,633.04. The Nifty 50 index was up 12.60 points or 0.12% at 10,820.65. Foreign portfolio investors (FPIs) sold shares worth Rs 1,372.84 crore yesterday, as per provisional data issued by the stock exchanges.

Overseas, most Asian stocks were trading on a mixed note. The Bank of Japan meets today, 15 June 2018 with no change to policy expected. US stock-market indexes closed mostly higher yesterday, 14 June 2018 on gains by big technology and media companies, outweighing laggard financial and industrial shares. Meanwhile, US President Donald Trump reportedly approved tariffs on about $ 50 billion of Chinese goods, as the US ratchets up its trade fight with Beijing over Chinas alleged pressure on US firms to transfer technology to Chinese partners. It wasnt clear when the tariffs would go into effect.

Meanwhile, the US dollar rose against a basket of major currencies as the euro cratered, and US stocks ticked up in afternoon trading on Thursday, as the European Central Bank signalled interest rate hikes were a long way off. The banks unexpectedly dovish decision overshadowed its statement that it aimed to wrap up its crisis-era stimulus program at the end of this year. The US dollar index, which measures the greenback against six other top currencies, rose 1.1 per cent.