The Indian rupee continued its downward trend, closing 24 paise weaker at Rs 85.64 against the US dollar on Tuesday, compared to its closing value of Rs 85.40 on Monday.
Anil Kumar Bhansali, head of treasury and executive director at Finrex Treasury Advisors LLP, noted that Asian markets showed positive movement on Tuesday, with US treasury yields stabilising, providing some respite for the US dollar.
Last week's downgrade of US sovereign credit by Moody's, due to concerns over the nation's growing $36 trillion debt, led to a sell-off in treasuries on Monday, which later stabilised during Asian trading hours.
The dollar index rose to 100.35 after nearing 100 the previous day, while the US 10-year yield fell to 4.4446%, a drop of nearly 10 basis points from the previous day's high.
Bhansali mentioned that Moody's downgrade was a temporary shock and not significant in the larger context, as it was not new information. With limited indications of imminent trade deals, markets are awaiting further direction. All three major US indices closed higher on Monday after initially falling by more than 1%.
Brent oil prices remained steady at $65.46 per barrel, as signs of a faltering US-Iran deal eased some oversupply concerns. However, the prospects of negotiations towards a Russia-Ukraine ceasefire weighed on sentiment, Bhansali added.
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