Rupee
The Indian rupee opened weaker and reached near two-week low levels against the US dollar, tracking losses in the local equity and Asian currencies markets.
At 9.10 am, the home currency was trading at 82.21 a dollar, down 0.37 percent from its previous close of 81.94. The domestic currency opened at 82.24 and touched a low of 82.27 — a level last seen on 12 July.
India’s benchmark Sensex and Nifty lost around 0.7 percent each on Thursday. Sensex in pre-opening was trading flat from its previous close.
A note from advisory CR Forex read, “The Indian Rupee is likely to face the heat of global risk-aversion could open lower around 82.25-30 levels, tracking broader strength in the DXY. Yesterday, the Rupee did not benefit despite a weaker dollar globally on the back of defense-related payment outflow, and the routine month-end dollar demand was also observed. However, the RBI might intervene in the spot market by selling dollars to curb unprecedented depreciation beyond the 82.50 to 82.70 zone.”
The recent release of upbeat U.S. economic data supported the dollar index, as a possibility of further interest rate hike by the U.S. Fed in the September policy meeting has increased, analysts said. The crude oil, which was trading above $80 a barrel also dampened sentiments among traders.
Overnight, as expected, the European Central Bank (ECB) hiked the interest rate by 25 bps, thus bringing the deposit rate to 3.75 percent. ECB’s President Ms Lagarde was somewhat dovish in her statements as she acknowledged that the European economic situation was deteriorating and there will be two inflation readings between now and September to assess the situation so far as the next meeting in September is concerned.
Asian currencies were trading mixed. The Japanese yen rose 0.25 percent, Thai Baht up 0.2 percent, China Offshore gained 0.19 percent, Singapore dollar 0.08 percent. Among losers, the Taiwan dollar fell 0.66 percent, the Malaysian ringgit 0.49 percent, the Philippines peso 0.47 percent, and Indonesian rupiah lost 0.4 percent.
The dollar index, which measures the US currency’s strength against major currencies, was trading at 101.16, down 0.10 percent from its previous close of 101.77.