Indian rupee fell sharply five-month low of 68.13 against dollar

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rupee 24indianews
Indian rupee fell sharply on Friday to a five-month low of 68.13 against the dollar, tracking the greenback's broad rise against other major global currencies. The US Federal Reserve yesterday signaled an imminent rate hike, pushing the greenback to nearly 14-year high against other major currencies. The Sensex also struggled today amid rupee fall and weakness in Asian markets. The dollar has been on a tear since Donald Trump's victory on expectations that inflation would rise in the US if the president-elect follows through on a pledge to spend big on infrastructure. Mr Trump's promised increase in infrastructure spending is also expected to boost economic activity, raising the possibility of more interest rate hikes from the US Federal Reserve. Expectations on a fiscal stimulus from Mr Trump has already driven US bond yields sharply higher, pushing the dollar's index against a basket of six major currencies to its highest level since 2003. The rupee has stumbled over 2 per cent since Mr Trump's victory last week. However, it has outperformed its emerging market peers, which have tumbled over 4 per cent each after Trump's election. Indian stock markets have also seen a selloff since Mr Trump's victory, tracking a fall in emerging markets. The Sensex has tumbled nearly 1,300 points in the past four sessions amid strong selling pressure from overseas investors. Foreign institutional investors have sold Indian equities worth nearly Rs 9,000 crore since Mr Trump's victory. A rate hike in the US would make dollar assets attractive. Apart from Trump's victory, strong US economic data has also fueled expectations of a rate hike from US Federal Reserve next month. Data released yesterday showed consumer prices in the US recorded their biggest lift in six months in October and housing starts surged to a more than nine-year high. Federal Reserve Chair Janet Yellen, in her congressional testimony, signalled that the central bank was on track to raise interest rates in December. At 10.14 a.m., the Sensex was down 55 points at 26,173 while rupee traded at 68.08 against the US dollar.

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