Indian Rupee Declines To Record Low Against U.S. Dollar

(RTTNews) - The Indian rupee weakened against the U.S. dollar in the European session on Monday, with larger economic challenges and increased worries about further U.S. taxes on Indian imports.

Indian shares opened on a positive note on Monday as new data showed the Indian economy remains on a solid footing.

The GDP print for the first quarter stood at 7.8 percent, the highest in five quarters and coming well above the consensus estimate of 6.8 percent.

Traders may also react to Prime Minister Narendra Modi's first visit to China in 7 years, with both leaders stressing that India and China are "partners, not rivals".

Although Indian money has fueled Moscow's war in Ukraine, Washington raised the tax on New Delhi imports to 50% from 25% in August for purchasing oil from Russia. The imposition of higher duties on India by the US has dampened the competitiveness of products made by Indian export-oriented sectors.

In other economic news, data from S&P Global showed that India's manufacturing sector expanded at the quickest pace in seventeen-and-a-half years amid robust growth in orders and production on the back of strong demand conditions.

The HSBC manufacturing Purchasing Managers' Index rose to 59.3 in August from 59.1 in July. A score above 50 indicates expansion, and the same was below the flash estimate of 59.8.

In the European trading today, the rupee declined to a record low of 88.347 from an early high of 88.11.

Looking ahead, U.S. Dallas Fed PCE index for July is due to be released in the New York session.

The U.S. stock markets remain closed today in observance of the Labor Day holiday.