Rupee Falls 7 Paise To 82.83 Per Dollar On Global Recession Worries

The rupee fell further in early trade on Friday after a deep sell-off in the previous session as the safe-haven dollar remained firm on mounting concerns that global monetary tightening could lead to a recession, with US data showing signs of weakening economic activity.  

According to Bloomberg, the rupee was last at 82.83 per dollar, compared to its previous fall of 82.7625 on Thursday.

Traders were hesitant to bet on the rupee falling below 83 per dollar in anticipation of an intervention from the Reserve Bank of India (RBI).

"Asian currencies were a tad weaker as the dollar index rose...the Indian rupee may open at 82.85 after it fell to 83.00 in the non-deliverable forward market overnight. Need to keep a watch on the RBI and see if it protects the rupee from falling beyond that level or not," said Anil Kumar Bhansali, Head of Treasury at Finrex Treasury Advisors.

PTI reported that the rupee fell 4 paise to 82.80 against the US dollar in early trade. 

After the opening moves lower on the rupee, there will be "understandable hesitancy" among traders with a psychological level of 83 nearby, a trader at a Mumbai-based bank told Reuters.

The trader added that it would "take a lot" for the rupee to fall below 83 towards a record low.

Risk sentiment took a hit with three major central banks - the US Federal Reserve, European Central Bank and the Bank of England - warning of more hikes to come, despite a threat of recession looming.

The dollar index weakened after it climbed the most since September on Thursday."It has been a big night in markets, with the modestly 'risk-off' reaction to the Fed on Wednesday from what was seen as a slightly more hawkish than expected set of outcomes, greatly exacerbated by the messaging out of the ECB's meeting," noted Ray Attrill, Head of Foreign-Exchange Strategy at National Australia Bank, according to Reuters.

The dollar, though, has had a turbulent week, putting it on course to lose by 0.5 per cent overall.

"The global markets are noisy and messy. You can't cut the volatility, but you can cut the risk pertaining to the same by following a system-driven hedging practice and risk management policy to deal with the noise and uncertainty," said Amit Pabari, Managing Director of CR Forex Advisors.

"However, the dollar bull narrative would not be sustained for long as yesterday's US retail sales slumped to -0.6 per cent vs the previous 1.2 per cent, which shows some loss of momentum in consumer demand for goods amid high inflation," he added.