The Indian rupee fell flat slipped to all-time low of Rs 84.4275 on Thursday and closed trade at Rs 84.4925. The major reason for the weakness was the renewed surge in FII selling after a brief low. The dollar strength also weighed on sentiment. Hopes of aggressive rate cut by the US Federal Reserve is supporting the dollar.
Dollar Index Movement
The US Dollar Index was hovering at 106.55 with a 0.12 per cent down from its previous close till 12:23 PM Indian Standard Time. In the past 5 days performance, the US dollar index has faced a downfall of 0.08 per cent, along with a gain of 2.43 per cent within a month.
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Fed Governor Michelle Bowman on Wednesday expressed discomfort with the central bank cutting interest rates while inflation continues to run above its target. “Markets need to monitor the dangerous escalation in the Ukraine-Russia war, now driven by increased military engagements from both sides, strategic policy shifts, and heightened international involvement,” DBS Bank said in a note.
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Expert outlook on rupee
Jateen Trivedi, VP Research Analyst – Commodity and Currency, LKP Securities said,”The rupee weakened further to 84.51 as pressure mounted due to the dollar scaling higher above 106.65 amidst renewed global uncertainties. Geopolitical tensions between Russia and Ukraine have resurfaced, adding to global risk aversion. Domestically, the Adani Group found itself in the spotlight for negative reasons once again, with allegations of US bribery creating negative sentiment in the secondary markets. This has further fueled FII outflows, continuing the trend of capital flight from Indian markets. The rupee’s trading range is expected between 84.35 and 84.65, with continued weakness likely in the near term.”
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Siddhartha Khemka,
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