The Indian rupee recorded its worst closing level against the US dollar on Thursday. The local currency closed at a new low of Rs 83.543 against the greenback. It had closed at Rs 83.537 a dollar on Tuesday after hitting an all-time low of Rs 83.555, according to Bloomberg data.
The depreciation of the Indian rupee can be attributed to a confluence of factors, each exerting pressure on the currency's value. Firstly, the surge in the US Dollar Index, reaching a five-month high, underscored the strength of the dollar against other currencies, including the rupee, according to Amit Pabari, managing director at CR Forex Advisors.
The economic fundamentals are likely to play a more significant role in currency movements, Pabari said. "This could potentially lead to appreciation in the rupee, possibly reaching levels between 83.00 and 82.80 in the near term as there is no major incentive for the rupee to hold its value near record-low levels."
Federal Reserve Chair Jerome Powell strikes a hawkish note and warns that later, inflation data shows lack of further progress. The 10-year US Treasury yields, the DXY and the Brent crude prices cooled off, considering no feeds from geopolitical angle. "For USDINR, 83.40 acts as a support, while 83.70 a resistance", Kunal Sodhani, vice president of Shinhan Bank, said.
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