How Anil Singhvi views USD-INR now after rupee's slide past 91

On Tuesday, December 16, the rupee sank below the 91 mark against the US dollar in an unprecedented move. Most analysts attributed the fall mainly to sticky dollar demand from foreign investors and uncertainty around a potential trade deal between India and the US -- the world's fourth-largest and largest economies, respectively. Uncertainty surrounding the global trade landscape has pressured the domestic currency for several months this year.

Declining for the fourth trading session in a row, the rupee settled at 90.93 against the greenback on Tuesday, gaining some ground after hitting an all-time low past the 91 level against the American currency.

The rupee registered an all-time low of 91.08 against the US currency on December 16.

Add Zee Business as a Preferred Source

On Tuesday, foreign institutional investors offloaded Indian shares to the tune of Rs 2,382 in the cash market, though domestic institutional investors made net purchases of about half of that amount, according to provisional exchange data.

As of December 16, FIIs have net sold Indian equities worth about Rs 23,456 crore -- with December set to be a sixth straight month of FII outflows for Dalal Street, the data shows.

On the flipside, for DIIs, December could be a 29th straight month of net purchases.

EDITOR'S TAKE | How market guru Anil Singhvi views rupee now

According to Zee Business Managing Editor Anil Singhvi, the next 2-3 trading sessions are likely to be challenging for the rupee versus the US dollar.

He also pointed out that there is a strong possibility of a key interest rate hike in Japan this week, with the yen carry trade set to come under pressure if it materialises.

The Bank of Japan (BoJ) is set to announce its policy decision on Friday, December 19.

"This is why the rupee is currently one of the weakest currencies... The impact of the yen trade is expected to fade around the 92.25–92.50 levels (against the US dollar)," said the market wizard.