- Indian Rupee (INR) falls to a new all-time low
- RBI helps to support the Rupee
- US Dollar (USD) rises to a 4-month high versus major peers
- Trump won the election
The US Dollar Indian Rupee (USD/INR) exchange rate is rising after losses yesterday. The pair fell 0.02% in the previous session, settling on Tuesday at 84.10. Today, at 22:00 UTC, USD/INR is up +0.18% at 84.24 and traded in a range of 84.11 to 84.41
. Indian rupee fell to a record low on Wednesday amid a sharp jump in the dollar and U.S. Treasury bonds as Donald Trump claimed victory in the US election. The rupee experienced its worst daily performance in over four months. Interventions by the Reserve Bank of India helped to limit losses compared to regional peers, which fell by as much as 1.8%.
The risk here is that the rupee could fall further if the US dollar continues to show strength.
Imagine market currencies were hit across the board amid concerns over Trump’s upcoming policies.
The latest political developments caused investors to shrug off growth in India’s dominant service industry, which picked up after falling to a 10-month low in September.
The US Dollar is rising across the board. The US Dollar Index, which measures the greenback versus a basket of major currencies, is rising 1.6%, trading at 105.05 after losses yesterday.
The dollar has surged to its highest levels since July last year after President Trump won the US elections by a solid margin. The former US president won 277 electoral seats against Harris on 224.
The Republican Party also won the Senate and is on track to take this house as well, which would result in a red sweep. This would give President Trump a strong platform to implement his policies regarding tax cuts and tariffs, which are considered to be inflationary.
Expectations of sticky inflation mean the Federal Reserve is likely to cut interest rates at a slower pace, boosting the US dollar
Attention now turns to tomorrow’s FOMC meeting by the Fed is widely expected to cut rates by 25 basis points.
