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Rupee falls 14 paise to 71 against US dollar in early trade

MUMBAI: The Indian rupee opened on a cautious note and fell 14 paise to 71.01 against the US dollar in early trade on Wednesday as concerns over the US-China trade deal weighed on investor sentiments.

Forex traders said, the rupee along with other Asian currencies weakened after reports surfaced that tariffs on billions of dollars in Chinese goods will stay in place until after the US presidential election in November.

At the interbank foreign exchange, the rupee opened weak at 71.01, showing a decline of 14 paise over its previous closing. The Indian rupee on Tuesday had closed at 70.87 against the dollar. Meanwhile, US officials in a statement on Tuesday said that the trade deal with China set to be signed on Wednesday does not include a deal to roll back tariffs imposed on most Chinese goods.

The joint statement from the Treasury and the US Trade Representative’s office said “there is no agreement for future reduction in tariffs. Any rumours to the contrary are categorically false.”

Traders said weak opening in domestic equities and foreign fund outflows weighed on the rupee, while easing crude oil prices and weakening of the American currency supported the domestic currency to some extent.

Domestic bourses opened on a negative note on Wednesday with benchmark indices Sensex trading 185.29 points down at 41,767.34 and Nifty lower by 66.20 points at 12,296.10. Foreign institutional investors (FIIs) remained net sellers in the capital markets, as they sold shares worth Rs 205.56 crore on Tuesday, as per provisional data.

Meanwhile, brent crude futures, the global oil benchmark, eased by 0.25 per cent to USD 64.33 per barrel. The dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.02 per cent to 97.34.The 10-year government bond yield was at 6.64 in morning trade.