The rupee tumbled a whopping 94 paise to 70.54 against the US dollar in the early deals on Monday amid weak global cues and continued outflow of foreign funds. The domestic currency had opened at 70.14, which was its lowest level since May 17.
On Friday, it had dived 54 paise to close at an over six-week low of 69.60 as soaring crude oil prices and a fresh flare up in US-China trade tensions weighed on emerging market currencies.
Continuing their selling spree, foreign investors have withdrawn a net amount of Rs 2,881 crore from the Indian capital markets in the first two sessions of August on account of domestic as well as global headwinds. According to latest depositories data, foreign portfolio investors (FPIs) pulled out a net sum of Rs 2,632.58 crore from equities and Rs 248.52 crore from the debt segment during August 1-2, taking the cumulative net outflow to Rs 2,881.10 crore. READ MORE
On the global front, investor sentiment took a heavy beating after the US President Donald Trump abruptly announced 10 per cent tarriff on $300 billion in Chinese imports. During the weekend, China vowed to fight back against US President Donald Trump’s abrupt decision.
China’s new ambassador to the United Nations said China would take “necessary countermeasures” to protect its rights and bluntly described Trump’s move as “an irrational, irresponsible act.” The tariffs could force the Federal Reserve to cut rates to protect the US economy from trade policy risk.
"Today, USD/INR pair is expected to quote in the range of 69.70 and 70.20," Motilal Oswal Financial Services (MOFSL) had said in the daily currency report.
In the global markets, Asian shares slid to 6-1/2-month lows on Monday and the yuan slumped to a more than decade trough as a rapid escalation in the Sino-US trade war sent investors stampeding to traditional safe harbours including the yen, bonds and gold. Oil prices were also pulled down again on demand worries, while gold climbed 0.65% to $1,450.41 an ounce, said a Reuters report.