The rupee continued its free fall on Tuesday and slumped 16 paise to a fresh record low of 71.3725 against the US dollar in early trade. A strong dollar, along with higher crude oil prices and escalating global trade tensions continued to hamper sentiment of the domestic currency, said forex dealers. On Monday, the rupee closed above the 71-mark for the first time ever.
The rupee had slipped 21 paise to hit a fresh record low of 71.2137 against the US dollar on Monday. However, the domestic currency recovered a tad to settle Monday’s trade at a fresh low level of 71.2050 against the American currency, Bloomberg data showed. “US planning to impose an additional $200 billion tariffs on China kept the trade tensions alive while impending Iran sanctions led the crude prices higher,” Geojit Financial Services said in a report.
“On the data front, domestic manufacturing PMI fell to a three low in Aug on the account of softer expansions in output and new orders,” the report said. ” For the domestic currency, now 71.43 is the major level in the downside below which more weakness is expected. On the other end, 69.57 and 68.17 remains resistance.”
A Reuters report said that US oil prices rose on Tuesday, breaking past $70 per barrel after two Gulf of Mexico oil platforms were evacuated in preparation for a hurricane. Meanwhile, Asian shares fell and the dollar turned higher on Tuesday as the trade dispute between the United States and China threatened to escalate this week, and as emergency austerity measures in Argentina underscored the turbulence gripping emerging markets, another report said.