On Tuesday, the Indian rupee fell past the 71-mark against the US dollar, to edge closer to its near six-month low. The decline was a reflection of losses seen by other Asian currencies due to political turmoil in Hong Kong, intensifying US-China trade spat and fears of Argentina's (also an emerging economy) credit default.
At 9.10 am, the rupee was trading at 71.15 a dollar, as per Bloomberg data, lower by 0.55 percent from its Friday's close of 70.79. Markets were closed in India on Monday on account of Eid. The currency opened at 71.16 on Tuesday and has so far touched a high of 71.13 and a low of 71.18 per dollar, a level last seen on 28 February. The rupee has declined by 2 percent so far in 2019.
China's central bank set the official midpoint reference rate for the yuan at a level weaker than the psychologically important 7-yuan-per-dollar mark for the fourth consecutive trading day. The People's Bank of China lets the spot rate trade with a range of 2 percent above or below the day's official midpoint fix.
Other Asian currencies were also trading lower with Indonesian rupiah down by 0.26 percent, Malaysian ringgit 0.24 percent, South Korean won 0.23 percent, Japanese yen 0.16 percent, Taiwan dollar 0.12 percent, China Renminbi 0.1 percent and Singapore dollar 0.07 percent. Thailand's Baht and Philippines peso, however, were trading higher by 0.22 percent and 0.1 percent, respectively.
In geopolitical tensions like the concerns of recession, trade tensions and political turmoils (as being experienced in connection with Hong Kong and J&K), the investors place their bets on US dollar, which is considered as a safe haven. The rise in valuation of the dollar has also been weighing the other currencies down. The dollar index was at 97.57, up by 0.19 percent from its previous close of 97.38.
Meanwhile, the Indian markets are also awaiting data on consumer price index-based inflation (CPI) that is due to be released in the evening.