Rupee falls to fresh record low ahead of US inflation knowledge; elevated crude prices dampen traders’ sentiment

The Indian rupee weakened additional on Friday to hit a fresh all-time low versus the US greenback as home equities fell amid danger aversion in markets ahead of the discharge of US inflation knowledge, which is seen influencing the tempo of future rate hikes by the US Federal Reserve. Furthermore, elevated crude oil prices additionally damage sentiment for the home forex, with market members fearing a fresh bout of overseas portfolio funding (FPI) outflows, given the unfavourable outlook on India’s inflation and present account account deficit. Rupee opened at 77.81 and was final buying and selling at an all-time low of 77.86 towards the dollar. The home forex had settled at a record closing low of 77.765 on Thursday.

Rupee consolidating in a slender vary regardless of volatility in home and world equities

Gaurang Somaiya, Forex & Bullion Analyst, Motilal Oswal Financial Services, stated, “Rupee hit its fresh all time low but in the last few sessions has been very resilient and is consolidating in a narrow range despite volatility in domestic and global equities and strength in the dollar against its major crosses. On the domestic front, RBI has been very actively intervening and curtailing the volatility for the rupee. Global crude oil prices have been rallying thereby putting pressure on inflation and leading to higher trade deficit.”

USDINR (Spot) to commerce with a constructive bias and is progressively headed in direction of 78.50

“Dollar is getting support at lower levels ahead of US inflation number that will be released today and FOMC policy statement that is scheduled next week. Expectation is that the Fed could continue to raise rates and maintain its hawkish stance. We expect the USDINR (Spot) to trade with a positive bias and is gradually headed towards 78.50 levels. On the downside 77.20 will continue to act as an important support in the short term,” Somaiya added.

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