Rupee Ends At Record Closing Low As EU Election Prompt Safe-Haven Dollar Bids

The Indian rupee ended at a record closing low against the dollar on Tuesday as the advent of right-wing party in Europe pushed investors towards the safety of dollar. Rising oil prices added to the demand for the greenback.

The local currency depreciated 7 paise to close at Rs 83.57 against the US dollar after having opened at Rs 83.49 on Tuesday, according to Bloomberg. It had closed at 83.51 on Monday.

The dollar index, which measures the greenback against a basket of six major currencies, was trading at 105.38 during mid-European trade on Tuesday, versus 105.15 in the previous session. The US 10-year yield fell to 4.449%. Brent oil prices rose to $81.57 per barrel.

"Brent oil prices were in recovery mode after falling below $77 as summer demand will mostly eat into global supplies," Anil Kumar Bhansali, executive director and head of treasury at Finrex Treasury Advisors LLP, said.

The greenback gained a boost when the euro-dollar pair traded heavily on the defensive due to political concerns from far-right parties gaining electoral majority in countries like France, Germany and Austria in the European parliamentary elections on Sunday.

"Concerns about far-right parties gaining momentum pushed financial markets into risk-averse mode, boosting demand for the safe-haven US dollar," Kunal Sodhani, vice president of Shinhan Bank, said.

"For dollar/rupee, Rs 83.40 will act as a support and Rs 83.60 as a resistance," Sodhani said.