Indian Rupee Slumps As Government Measures Seen Insufficient
17 September 2018 / Morning Brief
The Indian rupee little changed at 72.50 pair now at 72.63 against 71.8450 previous close.
Pair to tip in 72.30- 71.80 range today.
The Indian rupee was down to near record low against the dollar in early trade, as steps announced by the government to attract inflows and support the local unit fell short of market expectations. Broad strength in the dollar amid reports of U.S. likely imposing more tariffs on Chinese goods also weighed on the rupee.
The dollar held above a recent 1-1/2 month trough against a basket of major currencies on Monday, with investors cautiously awaiting news on the implementation of U.S. tariffs on an additional $200 billion of Chinese imports. Further escalation looks very likely in which the rate will likely be raised to 25 percent and more US tariffs threatened, while China may potentially pull out of trade talks entirely and escalate on the new front of outright export restrictions.
The euro EUR= and sterling each rallied last week on encouraging developments on terms for Britain's exit from the European Union, paring some safe-haven demand for the dollar. The euro was last at 1.1624, down from a three-week top of 1.1721. The pound also retreated, dropping from last week's peak of 1.3145 to 1.3071.
Global oil prices eased in early Asian trading on Monday on concerns that the United States is poised to impose additional tariffs on China, outweighing supply fears from upcoming sanctions on Iran. Brent crude oil futures LCOc1 dipped 16 cents, or 0.2 percent to $77.93 a barrel.
Gold inched up on Monday as bargain-hunters bought the metal after prices dipped in the previous session, amid reports that the United States is set to impose a new round of tariffs on Chinese imports. Gold was up 0.2 percent at $1,195.27 an ounce after falling 0.6% on Friday when it marked its third straight weekly decline.
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