The Indian rupee dropped 12 paise to 83.56 in early trade after closing at 83.44 earlier in the day. Due to growing expectations that Donald Trump will win the US presidency and a subsequent increase in US Treasury yields, the rupee was predicted to weaken at the start of trade on Tuesday.
Asian currencies declined 0.1% to 0.5%, with the offshore Chinese yuan falling below 7.3050 against the US dollar. According to a currency trader at a bank, the rupee will “have it difficult” today, in line with Asia.
A month after beginning trading in New York, the US 10-year yield reached a high of almost 4.50 percent on Monday. Investors who are growing more confident that Trump will win the November election are demanding higher yields on US Treasuries.
As per political betting website PredictIt, the likelihood of Trump winning the presidency has increased to 60% in the wake of US President Joe Biden’s widely criticised debate performance last week. A note from Morgan Stanley stated, “Given possible election outcomes, market participants are pricing in fiscal concerns and higher inflation.
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