Rupee Weakens Significantly, Reversing Its Best Single Day Gain In A Year

The rupee opened significantly weaker against the greenback as poor economic data, aggressive rate hike bets driven by surging inflation and risk aversion boosted the dollar..Bloomberg quoted the rupee at 79.6138, compared to its previous session close of 79.4588. The domestic currency opened weaker at 79.5413 and traded in 79.4850 to 79.6138 range, according to the news agency. .PTI reported that the rupee fell 3 paise to 79.55 against the US dollar in early trade..Government data on Wednesday showed India's economy expanded by a robust 13.5 per cent in the June quarter from a year ago, but below what was widely expected by the RBI, analysts and economists, with risks tilted more to the downside in the current fiscal year..Asian currencies were broadly lower on Thursday after data showed Asia's factory activity slumped in August as China's zero COVID curbs and cost pressures continued to hurt businesses, surveys showed on Thursday, darkening the outlook for the region's fragile economic recovery..On Wednesday, Indian stock, currency and money markets were closed on account of Ganesh Chaturthi, a day after soaring to mark several key milestones..On Tuesday, the Indian rupee notched its biggest one-day gain in a year against a wobbly dollar as domestic equities saw a rush of foreign investor inflows..Reuters reported that the rupee had its best session in a year on Tuesday, which traders attributed to a fall in long dollar positions and renewed chatter about the inclusion of Indian bonds into global indices..Tuesday's "against-the-trend" rally on the rupee "was surprising, to say the least", a dealer at a Mumbai-based bank told Reuters. Still, the rupee remains in a firm downtrend, and "it is most likely" that the Tuesday session "was an aberration.".The US currency rose broadly on Thursday, with the dollar index hovering near 109, with risk aversion and high Treasury yields boosting the demand for the safe haven dollar, driven by weak economic data and aggressive rate hike bets..But the rupee was expected to receive support from the slump in crude prices as the country imports over three-fourths of its oil needs..Oil prices fell to about $95 per barrel on Thursday, led lower by increased supply and worries that the global economy could slow further..The rupee opened weaker against the dollar as prospects of further aggressive policy tightening by the US Federal Reserve and the European Central Bank (ECB) weighed on Asian currencies and equities, Sriram Iyer, Senior Research Analyst at Reliance Securities, told PTI.."Oil prices remained subdued this Thursday and could cap losses, but weak Asian and emerging market peers will cap gains," Mr Iyer said, adding the range for the rupee in this session is 79.30 to 79.75..Domestic equities plunged sharply, reversing a two-month bull run.

Rupee Weakens Significantly, Reversing Its Best Single Day Gain In A Year

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