Most emerging Asian currencies slipped on Thursday, as global recession worries and anxiety over the Sino-U.S. trade tussle capped risk appetite while higher oil prices weighed on India’s rupee.
Investor sentiment towards most Asian currencies soured over the past two weeks, as an escalation in the tit-for-tat Sino-U.S. trade war added to fears of a recession in the world’s largest economy and fuelled a flight from risk assets.
India’s rupee will recoup this year’s losses against the dollar over the coming 12 months, according to market strategists polled by Reuters, who said the issuance of sovereign bonds in foreign currencies may help prop it up.
Global cues, such as a rise in protectionist measures along with a massive fall in the Chinese Yuan and other emerging markets (EMs) currencies, dented the Indian rupee.
US President Donald Trump has accused China of engaging in "currency manipulation" after the yuan broke below the level of seven yuan per dollar, a situation that has not occurred since 2008, and he urged the Federal Reserve to take measures to counter Beijing's move.
The US dollar declined as trade concerns persisted around global foreign exchange market, driving up safe-haven currencies including the Japanese yen and the Swiss franc.
The Supreme Court has granted six weeks time to the Reserve Bank of India (RBI) to file a report whether WhatsApp had complied with norms for launching its payment services.
The US dollar weakened against its major rivals in late trading on Thursday as market participants sifted through a slew of downbeat economic data. US manufacturing sector lost further momentum in July, the ISM reported.
The rupee tumbled 41 paise to 69.20 against the US dollar in early trade on Thursday amid unabated foreign fund outflows and rising crude oil prices.