Rupee exhales with relief and starts off positively

A day after plummeting to its all-time poor closing, the rupee exhaled a sigh of relief and somewhat strengthened versus the raging dollar.

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The rupee recovered somewhat against the raging dollar early on Wednesday, a day after collapsing to its all-time low closing.

According to PTI and Bloomberg, the rupee was trading practically unchanged at 79.58 against the US dollar in the early going.

However, there are still hazards to the world’s financial markets, and any changes appear insignificant in advance of the highly anticipated US inflation report from June, which most likely surged to a 40-year peak.

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However, as oil prices fell below $100 and domestic markets opened with optimism this morning, the rupee reflected an overall buoyant attitude during Asia trade hours.

The safe-haven stampede into dollar-denominated assets swept aside nearly every other currency, including the euro, which was on the verge of parity with the US currency for the first time since 2002, causing the rupee to crash and close the previous session at 79.60 against the dollar.

The euro fell to as low as $1.00005, its lowest level in nearly 20 years, as a reduction in Russian gas supply to Europe heightened the possibility of a recession in the eurozone, falling just shy of parity with the dollar on a technicality in terms of foreign exchange markets.

The euro was at the verge of reaching parity with the dollar, according to AFP, before climbing marginally, according to Reuters and Bloomberg.

The euro, meanwhile, was trading at $1.00265 on Wednesday morning. Investors were still watching to see if it would reach or fall below the $1 US mark for the first time since 2002.

Retail inflation in India for June remained above 7% and at the upper end of the Reserve Bank of India’s target range for the sixth consecutive month. The data’s specifics indicate that stronger pricing pressures will continue through at least the rest of the year.