The Indian rupee reached a new record low against the US dollar, weakening after an initially marginally stronger opening on Thursday. This drop was triggered by a rise in the dollar index, driven by expectations that Donald Trump’s potential election win might prompt higher US interest rates.
The rupee fell to ₹84.30, after beginning the day 2 paise stronger at ₹84.26. This depreciation followed Wednesday’s record low closing at ₹84.28, highlighting concerns over potential economic impacts from Trump’s policies, such as increased tariffs and aggressive trade stances, that spurred fears in global markets.
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The strength of the dollar was bolstered by market bets that a Trump victory would likely lead to tighter monetary policies and elevated US interest rates. This shift in sentiment led to a broader selloff, affecting currencies like the Chinese yuan and other Asian currencies.
During Asian trading hours, the dollar index, which measures the US dollar against a set of six major world currencies, was observed trading at 104.98. This rise contributed to the rupee’s fall and a decline in various regional currencies as uncertainty loomed.
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On Wednesday, the rupee’s drop mirrored a widespread decline among Asian currencies amid uncertainties surrounding the potential implications of a Trump administration. The Japanese yen was notably affected, declining by 1.2%, with similar trends observed in the Malaysian ringgit and other regional currencies.
Other currencies, including China’s offshore yuan, the Singapore dollar, and Thailand’s baht, fell over 1% during the trading session on Wednesday. These moves indicate broad market apprehension over policy shifts and their potential global economic consequences.
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