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Rupee dives to 3-week low at 68.01 on macro-liquidity shocks

The rupee today crumbled below the key 68-mark to end at a fresh three-week low of 68.01 against the US currency after the country’s trade deficit widened more than expected amid renewed global trade war fears. Panic dollar buying sent the home currency to a low of 68.04 in day trade before settling the week at 68.01 per dollar, down by 39 paise or 0.58 percent. This is the lowest closing for the rupee since May 24.

The Indian currency was the hardest-hit among Asian currencies which suffered due to a strong US dollar and emergence of macroeconomic headwinds.

India’s trade deficit widened to four-month high of USD 14.62 billion in May as imports surged nearly 15 percent.

Renewed trade war jitters look set to reclaim the spotlight further weighed on the trading mood as the US prepared to release a list of goods from China.

The US President Donald Trump has approved tariffs worth USD 50 billion on import of goods from China, triggering the possibility of a trade war between the world’s two largest economies after Beijing vowed to immediately retaliate.