The Rupee fell by 19 paise to 66.79 against the US dollar in early trade on Wednesday, tracking cautious trading in Asian currency markets on concerns over China's economic slowdown.
The Domestic currency had closed at 66.60 against the greenback in the previous session. Data released early morning showed China's services PMI fell to a 17-month low of 50.2 in December from 51.2 in November.
Manufacturing activity has already been seeing a contraction in the world's second largest economy. On Monday, the manufacturing PMI reading for December showed a slide for the 10th consecutive month to 48.2 from 48.6 in November. A number below 50 suggests contraction. A fall in the Chinese yuan has the potential to trigger outflows for emerging market (EM) funds, which could in turn weigh on the regional currencies.
On Wednesday, the yuan was trading 0.24 per cent lower at 6.53 against the US dollar. The Korean won (0.38 per cent), the Malaysian ringgit (0.17 per cent) and the Singapore dollar were all trading lower.
Meanwhile, currencies such as the Taiwanese dollar (0.51 per cent), the Japanese yen (0.40 per cent) and the Thai baht (0.06 per cent) were trading higher during the day. Calendar 2016 has kicked off on a poor note, with Asian currencies falling up to 2 per cent so far. The rupee is down 0.66 per cent. Some analysts do not expect the rupee to see a sharp fall during the rest of the year.
The Domestic currency had closed at 66.60 against the greenback in the previous session. Data released early morning showed China's services PMI fell to a 17-month low of 50.2 in December from 51.2 in November.
Manufacturing activity has already been seeing a contraction in the world's second largest economy. On Monday, the manufacturing PMI reading for December showed a slide for the 10th consecutive month to 48.2 from 48.6 in November. A number below 50 suggests contraction. A fall in the Chinese yuan has the potential to trigger outflows for emerging market (EM) funds, which could in turn weigh on the regional currencies.
On Wednesday, the yuan was trading 0.24 per cent lower at 6.53 against the US dollar. The Korean won (0.38 per cent), the Malaysian ringgit (0.17 per cent) and the Singapore dollar were all trading lower.
Meanwhile, currencies such as the Taiwanese dollar (0.51 per cent), the Japanese yen (0.40 per cent) and the Thai baht (0.06 per cent) were trading higher during the day. Calendar 2016 has kicked off on a poor note, with Asian currencies falling up to 2 per cent so far. The rupee is down 0.66 per cent. Some analysts do not expect the rupee to see a sharp fall during the rest of the year.
"The domestic currency has its own dynamics. Obviously, trade is one of them. Depreciation of the currency is going to help exporters. As our exports are on a weaker footing right now, that is something Indian exporters will be looking at. We are expecting about 3-4 per cent depreciation in the rupee in 2016,"
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