The Indian Rupee hit an all-time low to close at 83.33 (provisional) against the US Dollar on Wednesday after its value depreciated by nine paise. The decline was due to factors like strength of the US Dollar in the international markets, consistent outflows of foreign capital and negative sentiment prevailing in the domestic stock market, a PTI report highlighted.
According to forex traders, rising costs of crude oil due to the geopolitical uncertainties in the Middle East added to the Rupee’s woes.
The Rupee opened at 83.26 against the dollar at the onset of the day’s trading. Over the course of the trading session, the Rupee touched an intraday low of 83.35 and reached a high of 83.26 against the US Dollar.
In the end, the Indian currency settled for an all-time low of 83.33, a 9-paise fall from its rate of 83.24 at closing on Tuesday.
The geopolitical situation in the Middle East is being closely monitored by forex traders and the strong US Dollar, who anticipate that these factors are likely to continue to influence the performance of the Rupee negatively.
Moreover, the subdued tone in the domestic stock markets is exerting downward pressure on the Rupee’s exchange rate.
Anuj Choudhary, a Research Analyst at Sharekhan and BNP Paribas was quoted by PTI as saying, “We expect the rupee to trade with a slight negative bias on the strong Dollar amid geopolitical uncertainty in the Middle East. Weak tone in domestic markets may also weigh on the rupee. Traders may take cues from manufacturing PMI from India and ADP non-farm employment, JOLTS job opening, and ISM manufacturing PMI data from the US. Investors may remain cautious ahead of the FOMC meeting tonight. USD/INR spot price is expected to trade in a range of Rs 83-83.60.”
It may be noted that the US Dollar index, which measures the strength of the greenback against a basket of six major currencies, was trading 0.20 per cent higher at 106.87. Furthermore, Brent crude futures, a global oil benchmark, witnessed a rise of 1.34 per cent to reach USD 86.16 per barrel.