Indian rupee hit new all-time low as Trump takes early lead in US polls

The Indian rupee hit an all-time low of 84.23 against the US dollar on Wednesday after the early trends from the 2024 US Presidential election results signaled a lead for Republican candidate Donald Trump over Democrat Kamala Harris.

The early US election results boosted the dollar and weighed on the Indian currency.

The Indian rupee, or INR, fell to 84.23 against the US dollar, down 14 paise from its previous close at 84.09.

The INR is expected to experience selling pressure on Wednesday as the dollar index shot up nearly 1.50 per cent to a four-month high of 104.9 on November 6, while Asian currencies fell by at least 1.2 per cent.

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If Trump returns to the White House, winning the majority in the US election, he is widely expected to launch protectionist tariffs and policies.

Projections by US media outlets showed that Trump is expected to have secured 198 electoral collage votes, leading over Harris who stood at 112 votes, with results for battleground states yet to be called.

Forex traders are keeping a close watch on the US presidential election result and markets are gearing up for potential volatility over the coming days, especially with the Federal Reserve’s monetary policy meeting scheduled later this week.

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4 reasons why rupee declined to a new low despite a weak dollar

The US Fed is expected to announce a rate cut in its meeting scheduled later this week.

Also, persistent foreign fund outflows dragged down the rupee. As per exchange data, Foreign institutional investors (FIIs), on Tuesday, were net sellers in the capital markets, as they offloaded shares worth Rs 2,569.41 crore, according to exchange data.

Strong dollar could push rupee to new record low on November 6

On November 5, the Indian rupee hit its lowest exchange rate of 84.13 against the US dollar before slightly recovering towards the close of day’s trade.

Also Read: 4 reasons why rupee declined to a new low despite a weak dollar

As per a report by CNBC TV18, continued strength in the greenback could push the Indian rupee lower to a new record low on Wednesday (November).

Rupee safest emerging market currencies

Not just rupee, the dollar is also weighing on other emerging market currencies.

However, the Indian rupee has been one of the safest emerging market currencies so far this year.

The Reserve Bank of India, or RBI, has reportedly spent over $10.8 billion from the world’s fourth-largest reserves to defend the currency from the election-related volatility.

With inputs from agencies.