Indian Rupee: Recovers From Near 1-Month Low

The Indian rupee recovered against the dollar in early trades on Wednesday, 20 June 2018 from its near 1-month low on fresh selling of the American currency by banks and exporters. Selling of the greenback by banks and exporters supported the rupee but the dollars strength against other currencies overseas capped the gains. Investor sentiment also turned positive following higher opening of the domestic equity market.

The domestic currency rebounded to trade 32 paise higher at 68.06 against the US dollar in early session today. Rupee dipped to a low of 68.1775 and was last seen trading at 68.08. Yesterday, the rupee had nosedived 39 paise to end at a near one-month low of 68.38 against the US dollar as escalating trade threats between the US and China dented sentiment.

Domestic benchmark indices were trading higher in early trade. At 9:18 IST, the barometer index, the S&P BSE Sensex, was up 116.51 points or 0.33% at 35,403.25. The Nifty 50 index was up 39.40 points or 0.37% at 10,749.85. Overseas, Asian stocks were mixed, with several regional stocks looking to stem sharp losses made in the previous session that were caused by elevated fears of a trade war between the US and China.

US stocks declined on Tuesday, as investors sold stocks following President Donald Trumps late-Monday threat to slap an additional $ 400 billion in tariffs on China goods. The announcement represented the latest escalation in a dispute between the two largest economies in the world, rattling investors.

Meanwhile, the dollar index against a basket of six major currencies stood little changed at 95.123 after advancing to an 11-month peak of 95.296 on Tuesday. The index reached the 11-month peak after U.S. President Donald Trump threatened to slap more tariffs on China, prompting an angry response from Beijing. Escalating tensions triggered risk aversion and caused a sell-off in global equities on Tuesday. Last week the Federal Reserve hiked the interest rate target range by a quarter of a percentage point to 1.75 percent-2 percent, the highest in a decade.