Rupee Resumes Slump Against US Dollar After One-Day Break
Rupee weakened by 18 paise to close at 86.54 against the US Dollar on Thursday.
The rupee resumed its slump against the greenback on Thursday as the dollar index steadied in the European session. Moreover, crude oil prices were trading near over five-month high, which also pressured the Indian unit.
Rupee weakened by 18 paise to close at 86.54 against the US Dollar on Thursday. Indian unit settled at 86.36 a dollar on Wednesday.
The dollar index, which measures the strength of the US unit against the major currencies across the globe, steadied in European session as the euro and pound sterling declined after disappointing growth data from the UK.
The dollar index was on a declining streak from Tuesday after back-to-back data showed inflation is easing in the world's largest economy. "The dollar index hovered around the 109.1 level after signs of cooling inflation in the US, which reinforced market expectations of further rate cuts by the Federal Reserve later this year," said Ritesh Bhanshali, director, Mecklai Financial Services.
The rupee opened weak against the US Dollar on Thursday at 86.42. Oil future prices rose 0.66% to $82.57 a barrel in Asia session, touching the highest level since July 26, according to data on Bloomberg. Crude oil prices rose after data from the Energy Information Administration showed that oil inventories in the US declined more than expected in the world's largest economy.
A rise in crude oil prices increases India's import bills, subsequently pressures the domestic currency.
"The rupee is expected to be in the range of 86.35 to 86.65 a dollar. Exporters are advised to take hedges above 85.50 levels and importers are advised to take hedges below 86.40," said Bhanshali.
