Rupee Slumps 34 Paise To 81.65 As Dollar Recovers Sharply

Rupee Today: The rupee fell on Thursday against a resurgent dollar as appeal for safe-haven assets increased.

Rupee Slumps 34 Paise To 81.65 As Dollar Recovers Sharply

Rupee Today: Domestic currency falls against a resurgent dollar

The rupee fell on Thursday against a resurgent dollar as appeal for safe-haven assets increased after strong US retail sales data cast doubt on recent hopes that inflation is declining and that interest rates do not need to climb significantly. 

According to Bloomberg, the rupee was last changing hands at 81.6475 per dollar, compared to its previous close of 81.3063. 

The domestic currency traded in the 81.4563 to 81.6875 range against a resurgent greenback.

PTI reported that the rupee fell 37 paise to close provisionally at 81.63 against the US dollar.

The domestic currency has now fallen in three out of the last four sessions. It has surrendered almost half its 2 per cent rally from last week, fuelled by lower-than-expected US inflation data, reported Reuters.

"The rupee fell today against the dollar to a low of 81.67 before recovering to 81.57 after hitting a high of 81.44. Most Asian currencies were weaker but were relatively stable after the fall in the morning," said Anil Kumar Bhansali, Head of Treasury at Finrex Treasury Advisors.

The dollar index, which compares the value of the greenback to six major currencies, rose nearly 0.2 per, recovering from a three-month low in response to softer inflation data.

Still, for the year the US currency is up over 10 per cent on aggressive Federal Reserve rate hikes.

The message from Fed speakers is that they still have have further to go to fight price pressures after data showed US retail sales rose to the highest rate in eight months, despite the fact that inflation has just recently begun to decline after reaching decades-high levels.

However, other indications also point to a slowdown in the world's largest economy as consumers feel the pinch of the highest inflation in four decades.

Worryingly, the US Treasury yield curve's continued steep inversion suggests that investors are preparing for a recession.

“The overall macro outlook for the U.S. economy is one of fragile strength and this scenario continues to favor a modest easing – and then plateauing – of the pace of incremental tightening,” said Mr Ballard.

Featured Video Of The Day

"Twin Engines Of Growth Happening Here": Byju's Divya Gokulnath On Budget 2023
.