Rupee weakens against US dollar in early trade on Wednesday
The Indian rupee weakened against the US dollar in early trade on Wednesday amid concerns over renewed hostilities in the Middle East, rising crude oil prices and continued foreign fund outflows. Foreign institutional investors offloaded equities worth Rs 8,362.92 crore on a net basis on Tuesday, exchange data showed. Rupee fell further after the US Trade Representative proposed 12.5% additional duties on 54 countries, including India, for failing to prohibit the import of goods produced with forced labour. India strongly rejected the forced labor allegations and asked the US to end the investigations, asserting that such matters should be addressed within the framework of ongoing bilateral trade negotiations. Investors are monitoring ongoing developments in the Middle East and looked ahead to crucial US economic data for signals on the Federal Reserve’s next interest rate decisions. Market participants are also turned their attention to the RBI MPC rate decision on June 5, as inflation, growth and the rupee are under focus. Meanwhile, the RBI likely intervened in the forex market to curb the rupee's decline.
The partially convertible currency is currently trading at 95.77, weaker by 41 paise from its previous close of 95.36 on Tuesday. The currency touched a high and low of 95.7875 and 95.43 respectively.
