Rupee sinks 30 paise on US rate hike worries, crude spike
The rupee today sank 30 paise to close below the 70-mark against the US currency due to renewed worries about a hike in US interest rates amid global trade war jitters.The domestic currency ended at 70.11 per dollar, a loss of 30 paise or 0.43 per cent over the previous close. In day trade, the rupee had crumbled to a session low of 70.17 per dollar.The rupee suffered its the biggest single-day drop in past one week, snapping a two-straight session recovery trend.Forex sentiment wobbled with a resurgent dollar as currency traders increased their expectations for a fourth interest rate hike this year after the Federal Reserve released its meeting minutes overnight.The US Federal Reserve in meeting minutes indicated that it may hike rates again if the economy stays on track even as it flagged “ongoing trade disagreements and proposed trade measures as an important source of uncertainty and risks”. The US dollar launched a spirited recovery from its previous five days of losses and gained against its major trading peers. The US dollar index was up 0.37 per cent at 95.35 against a basket of six currencies.Speculative traders and investors also raised short positions on the Indian rupee.A fresh wave of global risk-aversion trade, triggered by the implementation of new tariffs by the world’s two largest economies revived fears of a full-blown trade war, further added to the downbeat mood.The US and China escalated their ongoing trade war by implementing 25 per cent tariffs on USD 16 billion worth of imports on both sides.A sharp spike in international crude oil prices due to a combination of factors also weighed on the trading front.The benchmark Brent was trading at USD74.55 a barrel today.
