The Indian rupee is on a slippery slope against the US dollar as it fell to a lifetime low of 87.25. Trump’s trade wars ignited drastic changes in the markets as local currencies dipped to new lows. The rupee is on the brink of falling further as Trump’s tariff threats are becoming a reality. Developing countries are looking to safeguard their economies as the US dollar is getting stronger.
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The sharp fall comes after Trump imposed 25% tariffs on imports coming from Mexico and Canada. He also imposed 10% tariffs on China starting Tuesday officially igniting the global trade wars. Since the Indian rupee moves in tandem with the Chinese yuan, the move added pressure on the currency. The US dollar is now the top-performing currency in the forex market due to Trump’s aggressive trade policies.
The development bolstered the US dollar as the DXY index touched 109.71 on Monday’s opening bell. It surged by 1.34 points in the day trade with an upswing of 1.23%. The Indian rupee is on a slippery slope against the US dollar and could fall further in the charts. Analysts predict that the rupee could extend its dip and fall to the 90 to 92 level in 10 months.
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Currency: Indian Rupee Dips, US Dollar Rises Under Trump
Trump’s trade policies are tilting towards the US as tariffs will strengthen the dollar in the currency markets. Financial analysts predict that Trump’s tariffs could further escalate making things worse for developing nations. The Indian rupee is on the crosshairs of a global trade shift making it fall lower against the US dollar.
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Leading investment bank Morgan Stanley predicts that Trump’s tariffs could escalate in the coming months. “Risks are skewed towards further escalation. Asia will be exposed on account of high trade orientation and seven economies run large trade surpluses with the US,” they wrote. In conclusion, the Indian rupee has more downturn than upside as the US dollar is a raging bull under Trump.