Global Investors are now avoiding taking risk due to deepening the possibility of a trade war. They are going towards Safe Havan Assets. In such a situation, the rupee fell 36 paise against the US dollar on Wednesday to close at the new all -time low level of 87.43 per dollar. Foreign currency traders said that due to increasing the possibility of global trade war, the rupee was traded with negative sentiments. The reason for this is that the people of the market are concerned about the impact of tariffs being imposed on each other by the US and China.
Rupee reached record low of 87.43
In addition, the concerns of cutting policy interest rate cut by the Reserve Bank of India and the widespread strength of American currency in the foreign market have also affected investors’ sentiments. The rupee opened with weakness at 87.13 in the Interbank Foreign Exchange Market and came to a low of 87.49 per dollar during the session. At the end of the trading, the rupee closed at a record low of 87.43, which is a decline of 36 paise against the previous closed price.
Dollar is becoming safe haven asset
On Tuesday, the rupee rose four paise to close at $ 87.07 per dollar. Research analyst Anuj Chaudhary of Mirae Asset Sharekhan said that the rupee came to the lowest level so far due to the increasing possibilities of interest rate cut by the Reserve Bank of India. Chaudhary said, “We hope that the rupee will trade with negative prejudice amid the dollar demand of importers and ongoing uncertainty on US trade duty. Increased tariff war can reduce global risk feeling and increase dollar demand as a safe investment option. ‘
US-China Trade War
US President Donald Trump is insisting on imposing 10 percent duty on US companies importing goods from China. On Tuesday, China retaliated by announcing its tariff on some American products and a no -confidence check in Google. Currently, Trump has postponed the intention of increasing his fee against Mexico and Canada for 30 days on Monday.
RBI may reduce interest rate
Meanwhile, the dollar index, depicting the dollar’s strength against the world’s six major currencies, was trading at 107.58 by 0.35 percent. Global oil standard brent crude futures fell 0.51 percent to $ 75.81 per barrel. Traders said that investors may be cautious before the results of the Reserve Bank’s Monetary Policy Committee meeting. It is likely that the RBI may cut the repo rate by 0.25 percent on Friday. This will be the first case of rate cut in the last five years.
(With PTI/language input)
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