Dollar crashes to seven-month low, losing global battle against Yen, Euro and Pound dominance

Business News:  While the rupee is continuously falling against the dollar, on the other hand, the dollar is getting tight in the international market. On Tuesday, the dollar reached a seven-week low. In fact, there are signs of weak employment figures in the US. Also, interest rates may be cut in the Fed meeting next week. Due to which the dollar is continuously falling. On the other hand, a slight decline has been seen in the rupee against the dollar in India as well. Due to which the rupee remains above the level of 88 against the dollar. Let us also tell you how the situation of the dollar and the rupee is being seen.

Which countries' currencies defeated the dollar?

The dollar weakened 0.2 percent against the Japanese yen to 147.21, while the pound sterling rose 0.1 percent to $1.3558, Reuters reported. The euro fell to $1.1752 after hitting its strongest level since July 24. Against several other currencies, the dollar fell to a low of 97.25, its lowest level since late July.

Economists estimate that 800,000 jobs could be lost, which could be a sign that the Federal Reserve is falling short in its efforts to achieve maximum employment. Traders' expectations of more aggressive easing by the Fed are gradually rising. According to the CME's FedWatch tool, the currency market has fully expected a 25 basis point rate cut, and the probability of a larger 50 basis point rate cut has also risen to about 12 percent.

Indian rupee also declined

The rupee on Tuesday lost its early gains and closed 3 paise lower at 88.12 (provisional) against the US dollar due to continued withdrawal of foreign portfolio investors and global trade tensions. Foreign currency traders said the rupee remained under pressure due to US tariff concerns on India and global trade uncertainties. Besides, continued foreign capital outflows also weighed on investor sentiment. At the interbank foreign currency exchange market, the rupee opened at 87.98 against the US dollar and after touching a low of 88.19, closed at 88.12 (provisional), down 3 paise from its previous close.

On Friday, the rupee hit an all-time low of 88.38 but pared all losses before closing 3 paise higher at 88.09 against the US dollar. The rupee had hit an all-time low of 88.15 against the dollar on September 2. The forex market was closed on Monday as the Maharashtra government had declared a public holiday on September 8 instead of September 5 on the occasion of Eid-e-Milad.

Decline may continue

Anuj Chaudhary, Research Analyst, Currency & Commodities, Mirae Asset Sharekhan, said that we expect the rupee to trade with a negative trend as the issue of trade tariffs between India and the US may keep the rupee under pressure. However, until there is any announcement, the market sentiment is showing signs of softening. Chaudhary further said that weakness in the US dollar index amid expectations of interest rate cuts may support the rupee at lower levels. He said that investors may remain cautious ahead of this inflation. The spot price of USD/INR is expected to remain between 87.80 and 88.45.

Stock market boom

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, fell 0.17 per cent to 97.29. Brent crude futures rose 0.59 per cent to trade at $66.41 per barrel. In the domestic stock market, the Sensex rose 314.02 points to close at 81,101.32, while the Nifty rose 95.45 points to close at 24,868.60. According to exchange data, foreign institutional investors sold shares worth Rs 2,170.35 crore on Monday.

Nirmala gave this statement on Rupee

Meanwhile, in a new statement, White House trade adviser Peter Navarro on Monday said India has to come to terms with the US at some point in trade talks or else it "will not be good" for India. In an interview to the show 'Real America's Voice', Navarro said the Indian government is angry with him and called India the "Maharaja" of tariffs. Finance Minister Nirmala Sitharaman has said the government is keeping a "close watch" on exchange rates.

She stressed that apart from the rupee, several other currencies have also depreciated against the US dollar. She said, "The fall in the rupee is mainly against the dollar, not against any other currency. This is also because the dollar has strengthened globally.