Rupee opened trading at a lifetime low of 79.71 (provisional) per US dollar compared to its previous close of 79.63
The Indian rupee touched a record low for the fourth straight session on Thursday. The local currency opened trading at a lifetime low of 79.71 (provisional) per US dollar compared to its previous close of 79.63. The strengthening dollar after US inflation had jumped to four-decade high and continuing outflow of foreign funds from the domestic market, have dragged rupee down.’
Read More: OYO offers upto 60% special discount for NEET 2022 woman aspirants –Check steps to avail it
The United States Consumer Price Index climbed to 9.1 per cent in June, the highest increase in more than four decades. Analysts expect that the United States Federal Reserve will hike the interest rates by another 75 to 100 basis points at the end of the month to tackle hot inflation.
More-than-expected rate hike by the central bank surged the value of US dollar on Thursday. The US dollar index, which measures the unit against six major currencies, was at 108.30 in the morning, as against the previous close of 107.75, showed Bloomberg data. The safe-haven appeal of US dollar has also been boosted amid growing fears of a recession.
The currency has slumped to a new record low level 26 times since Russia invaded Ukraine late in February, showed data.
India’s widening trade deficit and a persistent outflow of foreign investment have also taken a toll on the domestic currency. India’s merchandise trade deficit grew to a record $25.63 billion in June, according to the data released by the ministry of commerce and industry. The net outflow by foreign portfolio investors (FPIs) from equities reached Rs 2.21 lakh crore so far this year, showed data.
Read More: Customs duty evasion of Rs 4389 crore by Oppo India unearthed by Directorate of Revenue Intelligence
Will Rupee Hit 80-per-Dollar mark?
Analysts mentioned thay rupee could touch 80 against the US dollar soon. “The rupee is expected to depreciate today amid strong dollar and risk aversion in global markets. Market sentiments are hurt as red hot inflation in the US stoked bets that the US Fed may have to raise interest rates much more than expected, even 100 bps. Additionally, consistent FII outflows and concerns on looming recession may hurt rupee. USD-INR (July) is expected to trade in a range of 79.50-80.00,” said ICICI Direct in a note.
“The rupee plunged amid further weakness in the domestic equity markets and continuous FPI outflows. We expect the rupee to remain volatile this week and could hold its key support level of 80.05,” said Rahul Kalantri, VP commodities, Mehta Equities Ltd.
“As we approach the near term objective of 79.9, volatility may resurface, towards which end, the downside marker may be pushed higher towards 79.4. Dips to 79.58-50 may be an ideal entry point for longs,” commented Anand James – chief market strategist at Geojit Financial Services.
