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Rupee falls 18 paise to close at 69.40 against dollar on rising trade tensions

Mumbai: The rupee on Monday fell by 18 paise to close at 69.40 against the US dollar as renewed trade war worries following US President Donald Trump's threat to raise tariffs on Chinese imports sent markets into a tailspin and triggered a flight of capital to safe bets.

Foreign investors were net sellers in capital markets on Monday selling assets worth Rs 948 crore on a net basis, provisional exchange data showed.

Forex dealers said that Trump's comment that he would raise taxes on $200 billion of Chinese products to 25 percent from 10 percent from Friday affected investor sentiment in the currency market.

Gold and Japanese yen, considered as a safe haven investment in times of crisis, gained Monday while Chinese currency yuan fell to the year's low level against the dollar.

 Rupee falls 18 paise to close at  69.40 against dollar on rising trade tensions

Representational image. Reuters.

Other currencies such as the Turkish lira, the Mexican peso, and the Australian dollar declined up to 0.5 percent on trade worries.

The rupee opened weak at 69.38 and fell further to the day's low of 69.46 at the interbank forex market. The local currency, however, pared losses to close at 69.40, down 18 paise from the previous close. The rupee had strengthened by 15 paise to close at 69.22 against the US dollar Friday.

Crumbling domestic equity markets also impacted the trading pattern in the forex market, dealers added.

The BSE Sensex Monday cracked over 362.92 points in line with global sell-offs amid renewed fears that trade negotiations between the US and China are on the verge of collapse.

Similarly, the NSE Nifty dived 114 points to settle below the 11,600-level.

Meanwhile, the Dollar Index which gauges the greenback's strength against a basket of six currencies, rose 0.05 percent to 97.57.

Brent crude futures, the global oil benchmark, fell 0.40 percent to trade at $70.57 per barrel on fears that the trade war between the US and China could impact the demand for crude oil.

Meanwhile, Financial Benchmark India Private Ltd (FBIL) set the reference rate for the rupee/dollar at 69.3558 and for rupee/euro at 77.6360. The reference rate for rupee/British pound was fixed at 90.9980 and for rupee/100 Japanese yen at 62.62.

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Updated Date: May 06, 2019 18:07:55 IST