Rupee Hovers Around Record Low Against Dollar With Key US Economic Data In Focus
The rupee closed at a record low of 83.98 after opening at 83.98 against the US dollar, according to Bloomberg data.
The Indian rupee nearly touched 84, closing at a record low against the US dollar on Thursday, as crude oil prices steadied along with a flat dollar index. The currency hit an all-time low of 83.99 during the day.
The rupee closed at a record low of 83.98 after opening at 83.98 against the US dollar, according to Bloomberg data. The domestic currency had closed at 83.97 against the greenback on Wednesday.
"The rupee slipped by 1% against the dollar as RBI kept a watch on the real effective exchange rate, which showed that rupee is overvalued in July 24. RBI has been intervening in the markets both from buy side and sell side, thus increasing the reserves which are at record 682 billion as on Aug. 23 and keeping rupee stable at 83.97 for the past two months," said Anil Kumar Bhansali, head of treasury and executive director of Finrex Treasury Advisors LLP.
Oil prices steadied near their lowest close since June 2023 after an industry report indicated a significant drawdown in US crude stockpiles. Crude prices have been under pressure due to ongoing concerns about the economic outlook in major consumer countries and expectations of abundant supply.
The US Dollar Index was 0.14% lower at 101.22 at 3:47 p.m. IST. Brent Crude was trading 0.85% higher at $73.32 per barrel at 3:48 p.m. IST.
Brent oil traded at around $72.84 or 0.19% up as of 09:32 a.m. Traders were also keeping an eye on Libyan production, as a conflict between rival eastern and western governments poses a threat to supply, according to Bloomberg.
"The importance of today's ADP and Jobless claims and Tomorrow's Non Farm Pay Rolls and unemployment rate all the more increases to gauge the health of US economy. The data has potential to either confirm or refute the recession fears that we have seen in the market since the July NFPR report," Bhansali said.
The rupee's decline has largely been driven by global risk aversion, exacerbated by weaker business activity in the US, and an increased demand for the US dollar from importers, according to Amit Pabari, managing director of CR Forex Advisors.
The Indian rupee continues to remain weak despite Asian currencies rising as inflows get absorbed by RBI, while oil companies, FPIs and importers continue to buy dollar from market, keeping the currency on the lower side, Bhansali noted.
