Rupee Extends Weakness Against US Dollar: 10 Things To Know

The Indian rupee lowered by 13 paise to 70.24 against the US dollar in early trade today, reported news agency Press Trust of India (PTI). The weakening of rupee is due to the increased demand for the American currency from importers and banks, said PTI. According to forex dealers, a firm dollar in overseas markets, ahead of Federal Reserve Chairman Jerome Powell speech at the annual global central bank conference in Jackson Hole later in the day, weighed on the Indian currency today. 

Here are 5 key things to know:

1. On Thursday, the domestic currency had lost 30 paise to end at 70.11 against the greenback due to renewed worries about a hike in US interest rates and rising global trade war jitters. 

2. According to news agency Reuters, rupee has been one of the worst performing currencies among peers this year - raising fears of a repeat of the currency crisis of 2013. 

3. The movement in Indian currency affects markets. "Any sudden appreciation or depreciation of the rupee is not good as it adds volatility in the market. The rupee had experienced an orderly depreciation as it moved from Rs. 64 to a dollar to Rs.70 over a span of five to six months. Whether the rupee touches Rs. 72, it hardly matters", said Soumya Kanti Ghosh, Group economic advisor, State Bank of India (SBI).

4. The 9.3 percent fall in the rupee this year has also led to a surge in local prices of goods with an imported component.

5. July was the ninth straight month in which India's inflation was higher than the central bank's medium-term target of 4 per cent, reported Reuters.

6. Meanwhile, Asian stocks fell on Friday after US-China trade talks ended without progress, with the markets braced for a speech by Federal Reserve Chairman Jerome Powell for hints on the direction of US monetary policy. 

7. US President Donald Trump reiterated his displeasure with the Fed's rate hikes earlier this week and investors waited to see whether Powell would respond to such criticism.

8. Oil prices rose on Friday as US sanctions on Iran are expected to cut significant volumes of crude from the market, although trading was muted by concerns over the unresolved trade dispute between Washington and Beijing.

9. The domestic equity indices opened Friday's session on a negative note but soon recovered. According to brokers, besides profit-booking at record levels, a mixed trend at Asian markets following a negative leads from Wall Street dented the trading sentiments.

10. Domestic institutional investors (DIIs) bought shares worth a net of Rs 142 crore, while foreign portfolio investors (FPIs) accumulated shares worth a net of Rs 433.21 crore yesterday, provisional data showed. (With agencies inputs)