Rupee Recovers To 77.32 A Day After New All-Time Low Of 77.44

Rupee Recovers To 77.32 A Day After New All-Time Low Of 77.44
Written by Arindam
Rupee Recovers To 77.32 A Day After New All-Time Low Of 77.44

Rupee Recovers To 77.32 A Day After New All-Time Low Of 77.44

Rupee takes a breather a day after lifetime low of 77.44

The rupee recouped some of its losses and ended on Tuesday at 77.32 against the dollar, a day after melting to its all-time low of 77.44.

While the currency gained slightly from its new all-time low hit in the previous session, it was weaker than the 77.27 it opened at on Tuesday. Bloomberg quoted the rupee was last changing hands at 77.32 per dollar.

PTI reported, the rupee appreciated 12 paise to end at 77.32 (provisional) against the US dollar on Tuesday, snapping its two-day losing streak, supported by a rebound in regional currencies and fall in crude oil prices.

However, weak domestic equities and persistent foreign fund outflows restricted the gains, forex traders said.

In the previous session, the rupee had slumped 54 paise to close at a record low of 77.44 against the US dollar.

“The rupee recovered some lost ground after touching a life low of 77.53 on Monday. Rebound in risk assets and stronger regional currencies supported the rupee in today’s session.

“Some stabilisation in risk sentiment after a few days’ sell-off could help the local currency while rebound crude oil prices and fund outflows could adversely impact the rupee,” said Dilip Parmar, Research Analyst, HDFC Securities.

The International benchmark, brent crude, was down over $2 to last trade around $103.7 per barrel after sinking 6 per cent in the previous session as coronavirus lockdowns in China, the top oil importer, fed worries about energy demand.

However, rising concerns over higher interest rates and weakness in global economic growth kept the appreciation bias in check, they added.

Indeed, while the rupee reversed and recouped some losses, the bias and wider market moves point to more downside for the currency. 

The recent turmoil was spread across global financial markets, with a relentless sell-off in risk assets – such as world equities and bitcoin – deepening, driven by higher interest rates and their impact on economic growth worries. At the same time, the dollar held near 20-year highs.

Investors have shunned risk and sought safe-haven assets, as reflected by global equities in a sea of red.

“Rupee consolidated in a narrow range after falling to fresh all-time lows yesterday. Broader strength in the dollar against its major crosses kept the rupee weighed down,” said Gaurang Somaiya, Forex & Bullion Analyst, Motilal Oswal Financial Services.

“On the domestic front, the focus will be on the CPI number, and a higher number could cap gains for the currency. From the US,  market participants will be keeping an eye on the CPI number that will be released tomorrow,” he added.

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