Rupee falls to record low vs US dollar for second day in a row: 10 points
Premium- Analysts expect the dollar index to remain volatile ahead of the US inflation data
Indian rupee fell to record lows today amid broad dollar strength and elevated crude oil prices. The Indian currency fell to 77.82 against the USD dollar. On Thursday, the rupee had hit a low of 77.81 before closing at 77.74. Weak domestic equity markets also weighed on the rupee. The benchmark index Sensex was down 600 points in early trade. Analysts say rupee also plunged amid strength in the dollar index and ECB’s signal for raising interest rates from July policy meetings.
Rupee vs US dollar rate today: Here are 10 things to know
1) The ECB became the latest to join the tightening campaign, announcing Thursday the end of its bond-buying programme and signalling it will hike rates several times this year.
2) The US inflation data will be announced today. Expectations are that the Fed will hike by half a point for at least three more meetings before January.
3) Oil prices fell today but still hovered near three-month highs. Brent crude futures for August was down $1.01, or 0.8%, at $122.06 a barrel but still on track for fourth consecutive weekly gain.
4) India imports bulk of its petroleum requirement and a surge in oil prices pushes domestic inflation higher.
5) “The dollar index gained after the European Central Bank policy meeting in which the ECB left its interest rates unchanged but hinted of raising interest rates in July and followed it up with in September to control inflation. The dollar index crossed 103 marks once again and 10-year bond yields in the United States also hovered above 3.0% and supporting the dollar," said Rahul Kalantri, VP Commodities, Mehta Equities Ltd.
6) “We expect the dollar index to remain volatile ahead of the U.S. inflation data and could hold its support level of 102.55 on a closing basis in today’s session. On the other hand, the rupee showed weakness against the U.S. dollar amid rising crude oil prices and the Reserve Bank of India’s upward revision of the inflation target."
7) Kalantri expects rupee to test 78.20 levels in near term.
8) Foreign institutional investors were net sellers in the capital market on Thursday as they offloaded shares worth ₹1,512.64 crore, as per stock exchange data.
9) India's current account deficit is likely to hit a three-year high of 1.8% or $43.81 billion in FY22, as against a surplus of 0.9% or $23.91 billion in FY21, a report said on Thursday.
10) According to an assessment by India Ratings, the Current Account Deficit (CAD) has moderated to $17.3 billion or 1.96% of GDP in the fourth quarter of FY22 as against USD 8.2 billion or 1.03% in the year-ago period, and massively down from $23.02 billion or 2.74% in Q3, which was a 13-quarter high.