For the fourth straight day, the rupee falls to a historic low of 80 against the US dollar

As the US dollar persisted in its persistent advance against other major currencies today, the Indian rupee touched a record low for a fourth consecutive session.

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As the US dollar persisted in its persistent advance against other major currencies today, the Indian rupee touched a record low for a fourth consecutive session. Continued selling of Indian stocks by foreign institutional investors put additional pressure on the rupee.

The rupee today breached the previous session’s low of 79.66 to reach a new low of 79.74. On Wednesday, the local currency fell to a record low of 79.62 versus the US dollar.

The US dollar increased further today as hopes for a quicker Federal Reserve policy tightening were heightened by higher-than-expected US inflation figures. Growing recessionary anxieties have also contributed to the US dollar’s allure as a safe haven.

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On the strength of supply chain bottlenecks partially brought on by the Ukraine crisis and rising demand, the US consumer price index increased to a 41-year high of 9.1 percent in June, according to data released on Wednesday. President of the Atlanta Fed Raphael Bostic will speak at a gathering on Friday.

Following the publication of US inflation figures, some market watchers believe that the Fed may decide to increase borrowing prices by a full percentage point at its upcoming meeting this month. re easing a bit. The US jobs report on Friday revealed strong statistics, suggesting the world’s largest economy was enduring the rate hikes and providing the Fed with more flexibility for future increases.

The Fed’s efforts to tighten monetary policy have continued to drive up the dollar, which on Wednesday ultimately crossed the parity threshold with the euro before weakening somewhat.

According to a recent assessment from Moody’s, this year’s unpredictable weather patterns, the COVID-19 outbreak, Chinese lockdowns, and Russia’s invasion of Ukraine all conspired to disrupt supply chains worldwide and drive up costs.

Energy and food costs are anticipated to peak in the coming months before trending downward, according to the agency, but this prediction is predicated on the assumption that the current crisis in Ukraine would not worsen.

Brent crude futures have already fallen below $100 a barrel on concerns that rate increases by major central banks will impede economic growth and, consequently, reduce demand for oil.

In response to the U.S. inflation figure, the benchmark yield on 10-year bonds in India increased by 5 basis points to 7.39 percent. Bonds and the rupee are suffering as expectations that the widening interest rate disparity with the United States will further stifle dollar inflows into emerging economies, including India, are expressed by traders.