Gains in the Rupee a day after it reached 80 to the dollar for the first time ever

A day after forging a historic new low of 80 to the dollar, the rupee strengthened even more.

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Following a recovery following a first-ever breach of the crucial 80-per-dollar threshold on Tuesday that ended seven straight sessions of losses, the rupee advanced further early on Wednesday, tracking a broader global risk asset rebound.
According to Bloomberg, the rupee recently traded at 79.9413 versus the dollar after first pegged at 79.9187 and initially fluctuating between 79.9175 and 79.9450.

Following a new intraday low of 80.0600 against the dollar in the previous session, the Indian rupee recovered and increased to close at 79.9487 as the Reserve Bank of India intervened in the foreign exchange market to support the rupee’s stability.

After ending at 79.92 on Tuesday, the rupee increased two paise to 79.94 against the US dollar in early trade, according to PTI.

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However, Reuters noted that despite increases on the domestic stock market and minor drops in global crude oil prices, worries about a global dollar shortage persisted during morning trade on Wednesday.

According to Reuters, the partially convertible rupee was trading at 79.9450 to the dollar, barely changing from Tuesday’s record low of 80.0650, when it closed at 79.94.

While Indian stock markets were up 1.2%, Asian currencies were trading in a varied manner against the dollar.

As the US dollar lost momentum, the euro exhaled a sigh of relief and continued to rise overnight on hopes that Europe could be able to dodge the worst energy shortage concerns.

After posting its largest daily rise in a month of 0.75 percent overnight, the euro gained over 0.2% in early Asia trade to $1.0239.

A scorching reading on US inflation and concerns about a severe economic slump in the eurozone caused the euro to lose around 2.3% of its value since the beginning of July, and it broke parity last week for the first time in 20 years.

The depreciation of the dollar and the increased hawkishness of central banks worldwide in their efforts to rein in skyrocketing inflation both supported similar gains in other major currencies.

The dollar index measure against a basket of major currencies fell 0.08 percent to 106.58, a significant decline from its recent two-decade high of 109.29.

The rupee was able to somewhat recover from the previous crash thanks to both of those factors plus a decrease in oil prices.

Prior to predicted builds in US crude stocks as product demand declines, oil prices declined marginally in early Asian trade under pressure from efforts by global central banks to contain inflation.