Dollar vs rupees: This has led to a huge decline in Indian currency amidst the possibility of Trade War after the US President Donald Trump signed an order to impose fees on Canada, Mexico and China. The Indian rupee fell by 67 paise to a record low of 87.29 per dollar on Monday (February 3).
Forex traders said that Donald Trump has imposed a 25 percent fee on Canada and Mexico and 10 percent on China. This step is the first step towards the destructive global trade war. He said that due to continuous withdrawal of foreign capital and continuous demand of dollars from oil importers, the pressure on the rupee continued due to the widespread of American currency in foreign markets.
Amit Pabari, MD, CR Forex Advisors, said, “Financial markets were seen fluctuating at the beginning of the week, as US President Donald Trump continued his tariff threats and imposed duty on imports from Mexico, Canada and China. ”
Pabari said that this growing trade war has promoted the sentiment to avoid risk, increasing the US dollar’s safe demand, which has reached the level of 109.50. Meanwhile, the dollar index (which measures the strength of greenback compared to the basket of six currencies) increased by 1.30 percent to 109.77. ,
The trump tariff led to a bounce in the US dollar, leading to the global currency exchange to a low -lying level, as the Euro fell to 1.0224, GBP 1.2261 and Yen 155.54.
The market collapsed as soon as it opened
The rupee opened at 87.00 per dollar in the Interbank Forex Exchange Market and after the initial deals fell by 67 paise to 87.29 against the dollar. The rupee closed at 86.62 against the US currency on Friday. Meanwhile, the dollar index, showing the US dollar position against six major currencies, rose by 1.30 percent to 109.77. International standard Brent crude rose 0.71 percent to $ 76.21 per barrel. According to the stock market data, foreign institutional investors (FIIs) were selling on Saturday and purely sold shares worth Rs 1,327.09 crore.
Let me tell you, Trump of America signed an order to impose strict duty on goods imported from Mexico, Canada and China on Saturday, immediately thereafter, there has .
Stock market also falls drastically
The domestic stock market opened with a major decline in the first trading session of the week on Monday. The major benchmark index BSE Sensex opened 500 points and the Nifty slipped below 23,300. The Asian markets declined after US President Donald Trump’s announcement to increase tariff charges on several countries. Its impact was also seen on domestic markets.
Dr. VK Vijaykumar, Chief Investment Strategist of Geojit Financial Services, said that despite the best budget, the market will be under pressure of increased global uncertainty due to Trump’s tariff and ‘early stages of tariff’. At the moment, India is not affected by this. Therefore, the impact on the Indian market will be less. But by reaching the dollar index above 109.6, the FII will start selling more. This will bring the market under pressure. “