Indian Rupee: Eases Further On Increased Dollar Demand

The Indian rupee commenced little changed against the dollar in early trades on Friday, 03 August 2018 but dropped lower thereafter due to the increased demand for the American currency from importers amid sustained foreign capital outflows. Besides, US dollars gains against other currencies overseas on worries over escalating trade tensions between the US and China, also impacted the rupee sentiment today.

The domestic currency opened at Rs 68.70 and registered an intra-day high and low of 68.66 and 68.77 respectively so far during the day. In the spot currency market, the Indian unit was last seen trading at 68.76. On Thursday, the rupee had dropped by 27 paise to close at a one-week low of 68.70 against the US dollar.

The key indices extended early gains and hit fresh intraday high in morning trade. At 10:16 IST, the barometer index, the S&P BSE Sensex, was up 248.33 points or 0.67% at 37,413.49. The Nifty 50 index was up 78.30 points or 0.70% at 11,323. Shares jumped on bargain hunting after a recent sell off.

Overseas, most Asian stocks rose after sliding on trade jitters in the last session. The mood was, however, still cautious amid an elevation in trade tensions between the US and China. The trade war between the worlds top two economies intensified midweek after US President Donald Trump raised pressure on China by proposing a higher 25% tariff on $ 200 billion worth of Chinese imports. China reportedly responded on Thursday, saying that it was fully prepared to defend the interests of the people and free trade. US stocks ended a rocky session decidedly higher on the back of a record rally by Apple that took the iPhone maker to a market cap above $ 1 trillion, a runup that helped Wall Street set aside bothering trade issues between the US and China.

Meanwhile, the dollar firmed against a basket of currencies on Friday and hit a more than 14-month high against the yuan, with markets gripped by worries over escalating trade tensions between the United States and China. The dollar index (DXY), which measures the greenback against a basket of six other currencies, hit a fresh two-week high of 95.211. It changed hands at 95.139 at 0421 GMT.