Recently, the Indian currency rupee hit an all-time low of Rs 84.1725 against the US currency dollar, down 0.07% from its previous close at Rs 84.1075. Analysts share insights about it and say that Donald Trump’s victory in the US elections will likely affect the rupee adversely as his inflammatory policies might further strengthen the Greenback.
The Finrex Treasury Advisors LLP’s Executive Director and Head of Treasury, Anil Kumar Bhansali, said, “The dollar index rose to its four-month high of 105.12 as Donald Trump secured a clear mandate after winning the battleground state of Pennsylvania.” The US 10-year yields rose 17 basis points to a four-month high of 4.4%.
At the same time, other Asian currencies, such as the Japanese yen, euro, British pound, etc., witnessed a decline of as much as 1.2%. This happened because initial trends signalled an edge for Republican candidate Donald Trump, showing interest in so-called “Trump trades”.
Forex dealers expect the Indian currency to decline further in the upcoming days and inch up to 84.40.
The RBI (Reserve Bank of India) might intervene in trades in the market in the coming days with gentle gestures, as aggressiveness would hurt the export competition. With expectations of a further decline in the rupee, importers have panicked, resulting in a massive sell-off in the market.
