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• The Indian rupee and other Asian currencies declined as the dollar index rose following Trump's election win.
• The Reserve Bank of India is closely monitoring banks' speculative trading activity due to post-election market volatility.
• The U.S. dollar hit a one-year high, while bitcoin soared to a record $93,480, as Trump's election momentum continued.
• Global markets are experiencing significant shifts following the U.S. election results, with potential for increased trade tariffs influencing these changes.

The Indian rupee experienced a slight decline on Thursday, mirroring a trend seen across Asian currencies, as the dollar index rose to its highest level in a year. This surge in the dollar index, which was up 0.2% at 106.7, is attributed to the ongoing momentum following Donald Trump's victory in the U.S. elections. The rupee was at 84.4025 per U.S. dollar as of 11:00 a.m. IST, down from its close at 84.3775 in the previous session.

The election outcome in the world's largest economy has bolstered the dollar and U.S. bond yields, negatively impacting emerging market currencies. The post-election market volatility in global markets has prompted the Reserve Bank of India (RBI) to keep a closer than usual eye on banks' speculative trading activity, according to six bankers who spoke to Reuters on condition of anonymity.

The RBI's routine interventions and market vigilance have helped the rupee fare better than its regional peers. In the past, when the rupee faced headwinds, the RBI responded by asking banks to avoid arbitrage activity and not make short speculative bets on the currency.

Impact on Asian Currencies and Trade Tariffs

The offshore Chinese yuan has slumped nearly 1.5% and Thai baht is down 2.7% in November so far, while the rupee is down only 0.4% in the same period. MUFG Bank, in a note, suggested that Asian FX weakness still has legs, with tariff hikes likely to be in the pipeline, referring to the trade tariffs floated by Trump during his election campaign.

The U.S. dollar revisited a one-year high against major peers on Thursday, as a fourth straight winning session from momentum sparked by Trump's election victory eclipsed a rise in bets for Federal Reserve easing. On Thursday, the U.S. dollar hit a one-year high as Trump's election momentum continued, while bitcoin soared to a record $93,480.

Higher trade tariffs and tighter immigration under the incoming Trump administration are projected to fuel inflation, potentially slowing the Fed's rate-cutting cycle longer term. Expectations for deeper deficit spending are lifting Treasury yields, providing the dollar with additional support. The President-elect's Republican Party will control both houses of Congress when he takes office in January, Edison Research projected on Wednesday, giving him sweeping power to push his agenda.

Global Market Reactions and Future Projections

Equities excluding the US are tumbling, with an MSCI gauge at its lowest in three months. An index of developing-market currencies has lost more than 1% following the US election, coming close to erasing this year's gains. European stocks and the euro have flopped. Wednesday is shaping up to be another grim day, with an MSCI benchmark for Asian stocks sliding more than 1% and setting the stage for a weak session in Europe. Shares in South Korea were headed for a one-year low as foreigners sell companies like Samsung Electronics Co. that are vulnerable to trade protectionism.

Nifty 's short-term trend remains weak, with a potential drop below 23,800 likely to target the next support level around 23,500 (the 200-day EMA) in the near term. Immediate resistance is positioned at 24,050, according to Nagaraj Shetti of HDFC Securities. Mid and small-cap stocks faced similar pressure, with the Nifty Midcap 100 index falling by 1.07%, closing at 55,257. The Nifty Smallcap 100 index also tumbled by 1.28%, settling at 17,991.

Trump, who has said tariff is the most beautiful word in the dictionary, has threatened as much as 20% tariffs on all imports and 60% on those from China, even as economists warned such a measure would hurt U.S. and global growth. IT Services: Trump's 'America First' policies may lead to trade tensions, especially with China, which could boost India as a secondary hub for outsourced services and manufacturing. IT services companies in India, may benefit from continued demand for outsourcing, especially given their reliance on US- based clients.