By Malvika Gurung Investing.com -- The fell to a new lifetime low against the US dollar on Friday, breaching the 81 mark for the first time. It open
By Malvika Gurung
Investing.com — The fell to a new lifetime low against the US dollar on Friday, breaching the 81 mark for the first time. It opened the session at 81.09/$1 and slid 44 paise to record an all-time low of 81.2/$1 in early trade.
The domestic currency’s rout continued on Friday after suffering its steepest single-day percentage fall since Feb in the previous session, on the back of an ultra-hawkish US Fed’s outlook and lack of RBI’s intervention in the unit’s fall.
The Indian rupee was last seen trading at 80.95 against the .
The continued fall for the domestic unit on Friday is a result of fresh multi-year highs recorded by 10-year US Treasury yields and the 2-year yield hitting a peak of 4.16%, while the rising demand for dollar from importers weighed on the currency.
Post the Fed’s policy outlook and a supersized rate hike on Sept 21, the forex markets globally have become highly volatile and the Indian rupee is expected to weaken further.
“10Y UST yields continue to rise after hawkish Fed commentary. continues to be volatile but drifting higher only which also adds to rupee pressure. As per charts, DXY can test 112.40 levels. If globally USD is gaining strength, INR cannot remain under shelter and may have to align itself accordingly, only thing magnitude at a point in time may differ but not the trajectory.
For USD/INR, 80.40 now turns as a base while 81.35 a resistance,” states Kunal Sodhani, Vice President, Global Trading Center, Shinhan Bank.
With all the major events done for the month, investors now await the RBI’s MPC verdict on Sept 30. Further, the Bank of England r to 2.25% from 1.75% on Thursday in its fight against high inflation despite the economy entering a recession.
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