Indian rupee falls for 3rd consecutive session: What's the reason?
What's the story
The Indian rupee has weakened for the third consecutive session today. The fall comes in line with losses in global equities and a stronger US dollar. The rupee was trading at 93.33 against the dollar at around 9:10am, down by 58p or 0.61% from its previous close of 92.73. It opened at 93.26 and started trading within a narrow range of 93.26 to 93.37 during early trade hours today.
Geopolitical impact
Geopolitical tensions and their impact on global economy
The failed US-Iran talks and Donald Trump's plan to blockade the Strait of Hormuz have raised fears of a global energy supply shock. Oil and natural gas prices have spiked after Trump said the US would intercept any vessel that paid a toll to Iran for safe passage through Hormuz. Before these tensions, nearly 20% of the world's crude oil and LNG trade passed through this strategic waterway.
Market response
Regional currencies under pressure due to geopolitical risks
The rising geopolitical uncertainty and a stronger dollar have put pressure on Asian currencies. The Thai baht and Philippine peso fell by 0.74% each, while the South Korean won slipped by 0.36%. Other currencies such as the Japanese yen (down by 0.29%), Malaysian ringgit (down by 0.26%), Singapore dollar (down by 0.2%), Indonesian rupiah (down by 0.15%), and Chinese renminbi (down by 0.06%) also witnessed similar declines in value against the US dollar today.