Rupee settles 5 paise lower at 75.71 against dollar; forex traders concerned over rising US-China tensions
The rupee depreciated 5 paise to settle at 75.71 (provisional) against the US dollar on Wednesday, as market participants were concerned about rising tensions between the US and China amid coronavirus pandemic
Mumbai: The rupee depreciated 5 paise to settle at 75.71 (provisional) against the US dollar on Wednesday, as market participants were concerned about rising tensions between the US and China amid coronavirus pandemic.
Forex traders said the rupee was trading in a narrow range as positive domestic equities, rising optimism about a potential coronavirus vaccine and a revival of business activities were offset by a flare-up in US-China tensions.
Moreover, strengthening of the American currency overseas also weighed on the domestic unit.
#Rupee ends near day's low pic.twitter.com/69zqCzeHWy
— CNBC-TV18 (@CNBCTV18Live) May 27, 2020
At the interbank forex market, the rupee opened strong at 75.72 and gained marginal ground to finally closed at 75.71, down 5 paise over its last close.
It had settled at 75.66 against the US dollar on Tuesday.
During the session, the local unit witnessed an intra-day high of 75.57 and a low of 75.74.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, rose by 0.17 percent to 99.08.
"Rupee is trading in a very tight range, and not breaking the psychological level of 76. There is some optimism in the forex market over coronavirus vaccine and foreign inflows pertaining to Bharti Airtel Telecom stake sale, Kotak Mahindra Bank QIP or Reliance Jio but it's getting offset by the escalating US-China trade tensions.
"US President Donald Trump has already said that he is preparing against China over his efforts to impose national security on Hong Kong. The global growth is already in doldrums due to COVID-19, worsening relations between these two nations will further hobble growth," said Rahul Gupta, Head of Research- Currency, Emkay Global Financial Services.
Explained: How a US debt default would affect the global economy
The repercussions of a first-ever default on the US federal debt would quickly reverberate around the world. Experts say that 'no corner of the global economy would be spared'
US debt ceiling crisis: What a default could mean for America, the world
A US default looms large as Republicans and Democrats spar over raising the government’s spending limits. It has forced Joe Biden to cancel his upcoming trip to Australia, resulting in the Quad Summit with leaders from India, Australia and Japan being called off
India scraps the Rs 2000 note: Will this affect the economy?
The Rs 2000 note will remain legal tender but citizens have been asked to deposit or exchange these notes by 30 September. Analysts say this time the move is expected to be less disruptive as a lower value of notes is being withdrawn over a longer period of time