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Rupee settles to a record high of 78.32 against the dollar on currency outflows

The rupee closed at an all-time low of 78.32 against the US dollar on Thursday as the strength of the US currency and continued outflows of foreign funds weighed on investor sentiment.

In the interbank FX market, the local currency opened higher at 78.26 and hit a daily high of 78.22 on weakness in the US Dollar and Crude Oil in early trade.

However, a rebound in the greenback and Brent later hit Rupee sentiment, pushing the local currency to a daily low of 78.38. The rupiah eventually stabilized at 78.32, its all-time low against the US dollar.

The dollar weakened at the start of the Asian session after the chairman of the US Federal Reserve said a recession was possible as the US central bank raised interest rates to curb soaring inflation .

The rupee erased early morning gains as safe-haven demand pushed the greenback ahead of quarter-end adjustments, said Dilip Parmar, research analyst, HDFC Securities.

Parmar further said there was a strong chance of a near-rebound amid falling commodities, regional currency strength and a rally in risk assets.

“The USDINR spot should be in the narrow range of 78.10-78.50 before moving towards 79 odd levels,” Parmar said.

The dollar index, which measures the strength of the greenback against a basket of six currencies, rose 0.41% to 104.62.

Brent futures, the global oil benchmark, edged up 0.3% to $112 a barrel after initial losses as investors weighed recession fears.

According to Sriram Iyer, senior research analyst at Reliance Securities, the local unit continued to remain under pressure amid growing fears of a recession. Asian and emerging market peers were weak, with the exception of the Chinese yuan and the Malaysian ringgit.

“Indian bond yields ended higher as traders took profits. The benchmark 6.54% bond ended at 7.42%, compared to yesterday’s close at 7.40%,” he said. said Iyer.

The US dollar index traded higher in Asian trading, while the euro and sterling remained under pressure against the greenback, with disappointing German and French PMI data confirming that the eurozone economy struggling to gain ground.

The yen continued to appreciate amid the appeal of the safe-haven currency, Iyer said.

The Rupee traded in a range of 78.20-78.40 and finished near 78.30 as the Dollar traded neutral with the range-linked capital market Jateen Trivedi, VP Research Analyst at LKP Securities.

“Rupee weakness may continue until Crude stays above $95/bbl, any break below $95/bbl and sustained lower level on Crude will provide solid support for the Rupee “, said Trivedi.

Meanwhile, according to the minutes of the last meeting of the Monetary Policy Committee (MPC) published on Wednesday, the six members of the MPC, including the Governor of the RBI, expressed concern over continued inflation. high and pointed out that the central bank’s effort would be to lower the rate of price increases into the target range.

India recorded a current account deficit of 1.2% of GDP in 2021-22, compared to a surplus of 0.9% in the financial year 2020-21, due to a larger trade deficit, the Reserve Bank announced on Wednesday.

In absolute terms, the deficit for FY22 stood at $38.7 billion compared to a surplus of $24 billion a year ago, according to data released by the RBI.

On the domestic stock market front, the BSE Sensex ended up 443.19 points or 0.86% at 52,265.72, while the broader NSE Nifty gained 143.35 points or 0.93% at 15,556.65.

Foreign institutional investors remained net sellers in the capital market on Thursday as they dumped shares worth Rs 2,319.06 crore, according to stock market data.

(Only the title and image of this report may have been edited by Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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