Rupee weakens against US dollar on heightened tensions in middle-east

Indian rupee weakened against the US dollar on Wednesday, as domestic equity markets opened on the backfoot amid heightened tensions in the Middle East after Iran fired a series of missiles at an Iraqi airbase that hosts American troops. The attacks followed the US killing of Iran's top military commander in Baghdad, General Qasem Soleimani, on last Friday and triggered the fear of a broader conflict in the region.

The Rupee fell further due to the data showing India's GDP growth has been projected to slump to an 11-year low of 5 per cent in the current fiscal, mainly because of the poor show by the manufacturing and construction sectors.

Foreign Institutional Investors (FIIs) sold shares worth Rs 682.23 crore in the Indian equity market on Tuesday, showed the exchange data.

On the global front, the US dollar gave up some of its gains overnight following the release of better than expected non-manufacturing data. ISM non-manufacturing data for the month of December came in at 55, defeating projections of 54.5.

The partially convertible currency is currently trading at 72.03, weaker by 21 paise from its previous close of 71.82 on Tuesday. The currency touched a high and low of 72.0550 and 71.9750 respectively. The reference rate for the dollar stood at 72.09 and for Euro stood at 80.45 on January 6, 2020.