US midterm election results impact on Indian Rupee - INR vs USD - What's happening after Trump's loss?
The Indian rupee (INR) opened at a two-week high of 94.35 per US dollar on November 5, strengthening by 0.3% compared to the previous close of 94.64 per dollar. According to Reuters, the Indian rupee is poised to climb after oil prices tumbled on bets that the Republican Party's losses in the US midterm elections could push President Donald Trump towards ending the war with Iran.
The Democratic Party's decisive victory will mean they will be "more confident" about pushing back against Trump's policies on Iran, support of Israel and any escalation of tariffs, analysts at ING Bank said in a note, according to Reuters.
MUFG Bank said that the US midterm election "represents a meaningful shift" in the political landscape and will trigger an unwind of part of the political and geopolitical risk premium embedded in markets.
On Wednesday, the dollar index , which measures the greenback against a basket of six major peers, was down 0.4% at 101.3 with currencies like the euro, sterling and Swiss franc leading gains.
The rupee also touched a two-week high in early trading before trimming gains as importer and interbank dollar bids gathered steam around the 94.50 mark.
"It seems like selling USD/INR is bit of a risky endeavour at the moment since dips have very limited staying power at these levels," a trader at a state-run lender said.
A majority of analysts polled by Reuters expect the rupee give up its recent gains and slip again over the next few months as a volatile external environment continues to pressure the currency.
While a series of policy measures rolled out by the Reserve Bank of India since the Iran war began has supported the currency, elevated oil prices and weak portfolio flows remain key risks.
"The RBI has done what a central bank can do. It has intervened heavily, restricted currency markets, raised around $143 billion through a deposit and borrowing scheme and raised interest rates. These measures have avoided a disorderly collapse and bought time," Natixis said in a note.
"None of them addresses the causes of the weakness. A central bank cannot create export capacity, manufacturing investment or energy independence. Only structural reform can," the note added.
The midterm election results on Tuesday dealt a major blow to President Donald Trump and his Republican Party as the Democrats flipped both the House of Representatives and the Senate. The decisive verdict has left Trump with little room to maneuver, especially in some of his most controversial policies, including the retaliatory tariffs and the war with Iran. Trump, who has two more years left as the President of the US, has to veto legislation passed by the Democrat-controlled Congress.
For about a decade, Livemint—News Desk has been a credible source for authentic and timely news, and well-researched analysis on national news, business, personal finance, corporates, politics and geopolitics. We bring the latest updates on all the listed companies on BSE and NSE, startups, mutual funds, Union ministries, geopolitics, and untapped human interest stories from around the world, helping our readers to stay informed on the latest developments around the globe. Our Coverage Areas 1. Companies: Comprehensive news and analysis on listed and unlisted companies, corporate announcements, corporate chatter, C-suite, business trends, hiring alerts, layoffs, work-life balance, world's top billionaires and richest and more. 2. Personal finance: Insights into mutual funds, small savings schemes like - PPF, SSY, post office savings scheme, stock to watch, personal loans, credit cards, top bank FDs, real estate, income tax and more. 3. Politics: Comprehensive coverage of general elections, state elections and bypolls, Lok Sabha, Vidhan Sabha, Parliament, PMO, PIB, finance ministry, home ministry, among other union ministries and government departments. 4. National News: From metro cities like Delhi, Mumbai, and e to untapped stories from rural India, we cover human interest, health, education, crime and courts, and law and order, among other areas of public interest. 5. Economy: In-depth analysis of India's macro and micro-economic indicators like- GDP, inflation, forex, fiscal deficit, current account deficit, interest rate cycle, economic recovery, RBI circulars, indirect taxes, GST, Insolvency and Bankruptcy imports, exports and everything that impacts Indian economy. 6. Geopolitics: Well-rounded and deeply researched coverage on US News, Oval Office European Union, Ukraine Russia War, middle-east crisis, royal families and global leaders like - Donald Trump, Vladimir Putin, Kim Jong Un, Xi Jinping and premiers of other leading economies in the world. Meet the Team 1. Gulam Jeelani, Political Affairs Editor 2. Sugam Singhal, Senior Assistant Editor 3. Chanchal, Assistant Editor 4. Sanchari Ghosh, Chief Content Producer 5. Pratik Prashant Mukane, Chief Content Producer 6. Sayantani Biswas, Chief Content Producer 7. Ravi Hari, Deputy Chief Content Producer 8. Garvit Bhirani, Deputy Chief Content Producer 9. Akriti Anand, Senior Content Producer 10. Jocelyn Felix Fernandes, Senior Content Producer 11. Swastika Das Sharma, Content Producer 12. Mausam Jha, Content Producer 13. Riya R Alex, Trainee Content Producer
Get Latest real-time updates
Catch all the Instant Personal Loan, Business Loan, Business News, Money news, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
More
✕
Wait for it…
Oops! Looks like you have exceeded the limit to bookmark the image. Remove some to bookmark this image.