Rupee falls to record low against US dollar

Date:

The Indian rupee fell sharply on Monday, reaching the 80 mark against the US dollar after the aggressive speech by Federal Reserve Chairman Jerome Powell.

At 11 a.m., the rupee was trading at 80.04, compared to 79.86 on the previous trading session against the US dollar.

The rupee weakened to a low of 80.14 per US dollar in the first few minutes of trading on Monday, as the US dollar index gained strength well above 109.

The previous low in its lifetime for the rupee was 80.06 per dollar on July 19.

“The aggressive speech by the Federal Reserve, Jerome Powell, has led to a bid for the US dollar and a decline in global equities and a rise in bond yields. Restoring price stability will probably require a restrictive policy for some time. Fed speakers that the further trajectory will depend on data,” said Kunal Sodhani, Vice President, Global Trading Center, Shinhan Bank.

On Friday, Federal Reserve chairman Jerome Powell signaled that the US central bank will likely continue to raise and raise interest rates to tame inflation.

“Restoring price stability will probably require a restrictive policy to be maintained for some time,” Powell said. “The historical record strongly warns against premature easing of the policy.”

In a note, CR Forex said: “Following the aggressive speech, the odds of a 75 bps hike by the Fed had risen further to 70 percent in September. The market breakout led by Powell’s speech ruined the fortunes of US billionaires on Friday.” cut by $78 billion. In the FX package, the US DXY tested its 20-year high, the euro and the pound fell near their record lows. The yuan tested a two-year low, so the rupee is about to open at a record low of 80.10. The likely range for the day would be 79.70 to 80.30.”

The dollar index, which measures the dollar’s strength against the basket of six major currencies, stood at 109,370.

Sodhani added that given the persistence of high bond yields, DXY could test 109.77 levels, with EURUSD testing 0.9860 levels and GBPUSD heading towards 1.1680 levels.

Brent Crude prices also appear to be a bit tacky, unable to hold up at lower levels. Considering the above factors, USDINR may find strong support at 79.50 while a break from 80.06 levels will impact options sellers hitting their stop and send USDINR pair moving towards 80.60 levels.


The Valley Voice
The Valley Voicehttp://thevalleyvoice.org
Christopher Brito is a social media producer and trending writer for The Valley Voice, with a focus on sports and stories related to race and culture.

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