Rupee hits $ 80 per dollar for the first time ever;  More weakening seen

Rupee hits $ 80 per dollar for the first time ever; More weakening seen

Rupee reaches 80 per dollar for the first time ever

The rupee reached 80 per dollar for the first time ever on Tuesday, as traders focus on central bank meetings this week, especially the US Federal Reserve.

The real fear now is that after the rupee broke the 80-to-one-dollar level, the fall could be even steeper, as a breach of key psychological interest rates increases efforts in favor of a free fall after, as we have seen since the rupee weakened beyond the rate of 77 per dollar.

What does a debilitating Rupee mean to you?

Bloomberg quoted the rupee last at 80.0163 against the dollar after opening at 79.9863, reaching a record low of 80.0175 during the day. PTI quoted the rupee at a record low of 80.05 against the US dollar in early trading, a gain of 7 paise from the previous close.

Reuters said the Indian rupee reached a seventh consecutive session with record lows on Tuesday as the weakness in domestic equities weighed, but dollar-denominated intervention by the central bank helped limit further losses.

The partially convertible rupee traded at 79.93 / 94 per dollar after reaching a record low of 80.05, down from 79.97 on Monday, Reuters added.

PTI had reported on Monday that the rupee briefly reached a record low of 80 per dollar mark, but closed just below the key psychological level.

Reuters and Bloomberg reported on Monday that the partially convertible rupee fell to a record low closed level of around 79.98 against the dollar, towards the end of Friday at 79.88.

Both of these agencies said that the Indian currency had fallen to a low during the day of 79,985 per dollar during the session, while PTI said that the rupee had briefly reached a low during the day of 80.

The Indian currency has plunged more than 7 percent this year, closing at a record low in six of the last seven sessions.

The rupee has been hit by an exodus of foreign investors, growing trade and current account deficits and driven by a global rush into safe US dollars due to increasing global recession risk.

Foreign fund outflows from the country this year are more than the total inflow over the past two years, with foreign investors withdrawing a record $ 29 billion from Indian assets this year.

On Tuesday, Indian stock indices traded lower in opening deals after rising in two consecutive sessions, followed by wider sales in Asian markets, following an overnight fall on Wall Street.

Although the US dollar hovered just above a week’s low level, it reached overnight compared to major competitors as the markets reduced the odds of a percentage point increase in interest rates from the Federal Reserve this month.

Bets on large-scale easing increased last week after data showed that US inflation, already at four decades high, continued to accelerate in June.

But some Federal Reserve officials were quick to throw cold water on such talk, and figures from Friday showed a easing of consumer inflation expectations to a one-year low.

The dollar index – which measures the dollar’s performance against six counterparties – was flat at 107.47. It was outside Monday’s low of 106.88, but also far back from the high of 109.29 last week, a level not seen since September 2002.

“… the path to least resistance for the USD is to continue to trend higher due to the poor global growth prospects,” Commonwealth Bank of Australia analyst Carol Kong wrote in a customer note, referring to the dollar’s role as a safe haven.

The price of oil fell on Tuesday, and took a breather after rising more than 5 dollars a barrel in the previous session when a falling dollar supported buying interest.

Brent oil futures for the September settlement fell 69 cents to $ 105.58 a barrel. The contract rose 5.1 percent on Monday, the largest percentage increase since April 12.

Oil markets have been whipped between concerns about supply as Western sanctions on Russian crude oil and fuel supplies have disrupted trade flows to refineries and end users and growing concerns that the central bank’s efforts to curb rising inflation could trigger a recession that will reduce future fuel demand.

The price of crude oil fell over 5 percent last week.

Despite the recent drop in oil markets, news agencies reported last week that some banks were already asking for 80 rupees for a dollar for currency exchange, the State Bank of India.

The news flow in recent months has read that the rupee hits a new low almost every other day, and that trend is likely to continue, traders said.

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