Indian Rupee likely Higher As Yuan Gains After US Delays China Tariffs

Indian Rupee likely Higher As Yuan Gains After US Delays China Tariffs

12 Sep 2019 08:54 AM

Indian rupee is expected to open higher against the dollar after U.S. President Donald Trump postponed an increase in tariffs on $250 billion of Chinese shipments by two weeks, boosting demand for Asian currencies. The rupee will likely open at 71.51-71.56 compared with its previous close of 71.65.

The onshore Chinese yuan, up 0.2% at 7.0980 to the dollar, led Asian currencies higher on Thursday after Trump said on Twitter that at the request of Chinese Vice-Premier Liu He and as “as a gesture of goodwill,” he was delaying the planned increase in tariffs to 30% from 25% on $250 billion of Chinese imports by two weeks to October 15. Trump’s move came after Beijing earlier yesterday waived import tariffs imposed last year on more than a dozen U.S. goods. The U.S. president called China’s decision to exempt some U.S. goods a “big move” and a positive gesture before trade negotiators from both the countries meet in Washington.

Amid optimism over U.S.-China trade, the S&P 500 Index advanced 0.7% yesterday to close at an over two-month high. Equity index futures suggested that U.S. stocks could rise further.

Traders awaited the European Central Bank policy review later in the day. The common central bank is widely expected to ease policy amid muted inflation and growth worries.

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