The rupee recovered some of its losses and closed at 77.32 against the dollar on Tuesday, a day after melting to its all-time low of 77.44.
While the currency rose slightly from its new all-time low in the previous session, it weakened from Tuesday’s open at 77.27. Bloomberg said that the rupee was last changing at 77.32 per dollar.
The rupee on Tuesday edged higher by 12 paise at 77.32 (provisional) against the US dollar, breaking a two-day losing streak, a rebound in regional currencies and fall in crude oil prices, PTI reported. supports.
However, weak domestic equities and frequent foreign fund outflows limited the gains, forex traders said.
In the previous session, the rupee had lost 54 paise to close at a record low of 77.44 against the US dollar.
The rupee recovered some of the lost ground after touching a low of 77.53 on Monday. A rebound in riskier assets and stronger regional currencies supported the rupee in today’s session.
“Some stabilization in risk sentiment after a couple of days of selling could help the local currency, while crude oil prices and fund outflows could impact the rupee adversely,” said Dilip Parmar, Research Analyst, HDFC Securities.
The international benchmark, Brent crude, was down more than $2 in the previous session around $103.7 a barrel after sinking 6 per cent in the previous session as the coronavirus lockdown in China, the top oil importer, worried about energy demand.
However, rising concerns over higher interest rates and weakness in global economic growth tempered the appreciation bias, he said.
In fact, while the rupee reversed and recovered some losses, bias and broader market movements point towards further downside for the currency.
The recent turmoil spread across global financial markets, with continued selloffs in riskier assets – such as world equities and bitcoin – driven by deepening, higher interest rates and their impact on economic growth concerns. At the same time, the dollar remained close to the highest level of 20 years.
Investors have avoided risk and sought safe-haven assets, as evidenced by global equities in the Red Sea.
Gaurang Somaiya, Forex and Bullion Analyst, Motilal Oswal Financial Services, said, “Rupee consolidated in a narrow range after falling to its lowest level yesterday. A broader strength in the dollar against its key cross kept the rupee weak.”
“On the domestic front, the focus will be on CPI numbers, and higher numbers may limit gains for the currency. From the US, market participants will be eyeing the CPI numbers which will be released tomorrow,” he added. ,