The dollar steadied after heavy losses against the yen.
The Indian rupee continued its downward journey on Tuesday morning amid mounting fears of a coronavirus-led economic slowdown. Against the UAE dirham, the rupee was trading at 20.19 at 10:50am (UAE time), according to XE.com.
Forex traders said weak opening in domestic equities and foreign fund outflows dragged the local unit.
Though weakening of the American currency in the overseas market and easing crude oil prices supported the rupee, but traders believe there is mounting fears of recession in major economies due to the coronavirus outbreak and this could weigh on the local unit.
On Monday, the rupee opened weak at 73.99 at the interbank forex market and then fell further to 74.03, down 16 paise over its last close. The rupee had settled at 73.87 against the US dollar on Friday.
Dollar extends gains
The dollar steadied somewhat on Tuesday after heavy losses against the yen, the euro and the Swiss franc, but traders warn the risks to the greenback remain high as policymakers try to fight off the widening fallout from the coronavirus epidemic.
The US currency started to grind higher as Wall Street stock futures rose, and bond yields bounced, after US President Donald Trump said the White House will hold a news conference on Tuesday about economic measures in response to the virus.
The dollar rose 2.3% to 104.73 yen, pulling back from the lowest in more than three years.
The yen also wobbled against major crosses, such as the euro and the Australian dollar, after Bank of Japan officials indicated their readiness to ramp up stimulus if needed before a policy meeting next week.
Against the euro, the greenback rose 0.72% to $1.13500 after falling on Monday to its lowest in more than a year against the common currency.
The dollar rose 1.2% to 0.9361 Swiss franc on Tuesday after three days of heavy selling pushed it to the lowest in almost five years. Data suggests the Swiss National Bank is now ramping up its market interventions to weaken its currency.
Against the pound, the US currency rose 0.7% to $1.3036.
The dollar gradually accelerated after US stock futures opened higher and Treasury yields climbed off record lows.
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