US trade war likely to weaken rupee to all-time low against dollar

The Indian rupee would continue to witness pressure in the coming days, but it should get respite in the medium term as trade protectionism ends up hurting the US economy, a net importer of goods. For now, there is every possibility that the rupee would depreciate another 40-50 paise, and may even touch record lows of 68.85 a dollar. However, breaching record lows would be highly unlikely, considering that the recent fall in oil prices and all indications point towards a decline in the dollar. 

The US dollar strengthened sharply since January. From 88.25, the dollar index has moved up to 94.75 level. The index measures dollar’s strength against major global currencies. “We expect dollar strength to reverse in the next six months,” said Kaushik Das, India economist of Deutsche Bank AG.