Rupee vs Dollar: Rupee in free fall at 67.375, deadly trifecta hurting currency
Indian rupee was trading at 67.375 up by 0.200 points or 0.30% against US dollar.
The Indian rupee has continued to depreciate further against US benchmark dollar index on Wednesday at interbank forex market. In early opening, the domestic unit plunged by 37 paise to 67.45 against the US dollar following surging demand for the greenback as crude oil prices zoomed past USD 76 per barrel level amid foreign capital outflows. With this, rupee has entered into free fall and is trading at over 15-month low against US dollar.
At around 1138 hours, Indian rupee was trading at 67.375 down by 0.200 points or 0.30% against US dollar.
Kotak Securities said, "Rising oil, rising rates and rising USD, the deadly trifecta is taking USD higher against Indian Rupee."
It added, "With robust US economic growth, tightening labour market and risk of inflation from late cycle fiscal push from Trump administration, market is gradually starting to price faster hikes from Fed. All this augurs well for USD and bad for EM currencies like Rupee."
On Tuesday, President Trump pulled out of the Iran deal and re-imposed sanctions. On a positive note, Trump kept doors open for a new deal with Iran in future.
In previous trading, Indian rupee gained 5 paise to 67.08 against the US currency on suspected RBI intervention and stray dollar demand. Also, foreign investor pulled out about Rs 1,677.50 crore cumulatively in equity, hybrid and debt market.
Meanwhile, the benchmark BSE Sensex was trading at 35,266.35 above 50.03 points or 0.15%, however, it fell 82.12 points, or 0.23% to 35,134.20 in early trade today. On the other hand, Nifty 50 surged by 10.25 points or 0.10% trading at 10,728.05.
Going ahead, Kotak said, "USDINR is trading at 67.40 levels on spot, highest levels since Feb 2017. Technically, the pair is slated to test resistance around 67.55 levels and above that, around 67.70 levels on spot. Intermediate trend remains upward, as long as prices hold above 66.50 levels on spot on a weekly closing basis. Therefore, a decline in prices can be seen as a technical correction within an ongoing uptrend."
Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.