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Rupee weakens against dollar on escalating trade war concerns

26 Aug 2019 Evaluate

Indian rupee weakened against the US dollar on Monday, pressured by concerns over the latest escalation in the Sino-China trade war over the weekend. The Trump on Friday announced a 5% additional duty on $550 billion in targeted Chinese goods, after China unveiled retaliatory tariffs on $75 billion worth of American products. Further, strengthening of the American currency against other currencies overseas, and foreign fund outflows too weighed on the local currency. Foreign institutional investors (FIIs) remained net sellers in the capital markets, pulling out Rs 1,737.20 crore on Friday, provisional data with the exchanges showed. However, Finance Minister Nirmala Sitharaman's announcement of several measures to boost economy supported the domestic currency and restricted the fall. On the global front, China’s currency yuan hit an 11-year low amid concerns over the US trade war and the potential recession in global markets, while the Japanese yen surged as anxious investors flocked to safe-haven assets.

The partially convertible currency is currently trading at 72.16, weaker by 50 paise from its previous close of 71.66 on Friday. The currency touched a high and low of 72.1800 and 71.9200 respectively. The reference rate for the dollar stood at 71.72 and for Euro stood at 79.39 on August 23, 2019. While the reference rate for the Yen stood at 67.26, the reference rate for the Great Britain Pound (GBP) stood at 87.61.

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