The Indian Rupee resumed its downward trend against the Pound and extended its losing streak against the US Dollar as risk aversion continues to spread across Asia and emerging markets.
The rout began last week following the release of data out of the world’s second largest economy, China, showed a slowdown in its economic growth. The data sparked a selloff across the world as investors grew risk averse.
The Chinese manufacturing sector showed an unexpected contraction in January, heightening fears about the future of emerging-market economies that depend on China for trade or its demand for commodities.
The Turkish Lira hit record lows and the Russian Ruble and South African tumbled to multi-year lows. Today the Indian Rupee slumped to a two-month low against the US Dollar and its lowest level since last August against the Pound.
Also hammering the emerging market are the worries over the US Federal Reserve’s decision to taper its monetary stimulus programme. The Fed is expected to reduce the stimulus programme again on Wednesday when its two day long monthly policy meeting comes to an end. A recent run of positive US data has increased expectations. As a consequence of the uncertainty the Rupee breached the psychologically important 63 per Dollar mark.
The Rupee is likely to fall further on Tuesday as traders look ahead to the Reserve Bank of India’s upcoming monetary policy review. The Bank is expected to hold key policy rates intact.
Indian Rupee (INR) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Pound Sterling,
,Indian Rupee,104.380 ,
US Dollar,,Indian Rupee,63.157 ,
Euro,,Indian Rupee,86.360 ,
Australian Dollar,,Indian Rupee,55.161 ,
[/table]
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