Thursday, October 6, 2022

Rupee dives 18 paise to freshlifetime low of 78.22 per USD

The rupee plunged 18 paise to close at a new all-time low of 78.22 against the US dollar on Wednesday as a lacklustre trend in domestic equities and persistent foreign fund outflows weighed on investor sentiment.
Participants also stayed on the sidelines ahead of the US Federal Reserve’s policy decision. At the interbank foreign exchange market, the local currency opened firm at 77.99 and finally settled at its all-time low of 78.22, down 18 paise over its previous close of 78.04.
The rupee has now closed at record lows for four straight sessions.
“Expectation is that US central bank could raise rates by 50 bps. Hawkish comments could continue to keep the dollar supported at lower levels. Major crosses remained under pressure following broad gains in the dollar,” said Gaurang Somaiya, Forex & Bullion Analyst, Motilal Oswal Financial Services.
Somaiya added, “We expect the USD-INR to trade with sideways and quote in the range of 77.70 and 78.40.” The dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.64 per cent to 104.84.
Brent crude futures, the global oil benchmark, declined 1.07 per cent to USD 119.87 per barrel.
On the domestic equity market front, the BSE Sensex ended 152.18 points or 0.29 per cent lower at 52,541.39, while the broader NSE Nifty shed 39.95 points or 0.25 per cent to 15,692.15. Continuing their selling spree, foreign institutional investors offloaded shares worth a net Rs 4,502.25 crore on Tuesday, as per stock exchange data. “The Indian Rupee depreciated against the dollar on Wednesday, in line with mostly weaker regional peers ahead of the Federal Reserve’s policy announcement,” said Sriram Iyer, Senior Research Analyst at Reliance Securities.
Lack of any major triggers kept the rupee in a small trading band. The US dollar index traded lower as traders braced for the US Fed meeting outcome. According to Emkay Global Financial Services, the US dollar is expected to soar further and equity markets will come under pressure if the Fed takes an aggressive stance for future rate hikes even if it hikes rates by 75 bps on Wednesday.
“Rising crude oil prices have also added to the Rupee’s woes as Brent crude oil prices hit a three-month high of USD 125.14/barrel on Tuesday. A breach of 78.30 levels will trigger further Rupee depreciation towards 78.55/78.75 levels,” it added.

SourcePTI