Rupee weakens beyond 70 against dollar, may slide further: 5 things to know1 min read . Updated: 25 Apr 2019, 05:36 PM IST
- High oil prices and a stronger dollar weighed on the rupee
- Bullish bets on rupee seen receding: Reuters poll
The Indian rupee today fell beyond 70-mark against the US dollar, falling to 70.29/dollar at day’s low. Opening at 70.0163 a dollar, the rupee between 69.92 and 70.29 against the US dollar. The rupee later pared some losses and settled 39 paise lower at 70.26 a dollar. A broad strengthening of the US dollar and elevated oil price have put the Indian currency under renewed pressure. The rupee had hit an all-time low of 74.48 in October, weighed down by a combination of factors – high crude prices, foreign portfolio outflows and a stronger US dollar – had pushed the rupee.
Here are 5 things to know about rupee dollar trade today
1) “The US dollar has strengthened across the board. With most central banks having turned dovish given downside risks to growth and tepid inflation, the US Fed could end up being the least dovish given that US data has been holding up. The data and policy divergence could fuel the US dollar rally," forex advisory firm IFA Global said in a report.
2) Brent crude oil prices today rose above $75 per barrel for the first time in 2019 in the wake of tightening sanctions on Iran. The US decision to try and bring down Iran oil exports to zero comes amid supply cuts led by producer Organization of the Petroleum Exporting Countries (OPEC) since the start of the year aimed at propping up prices.
3) Higher oil prices may put further pressure on India’s macro and thus Indian currency, says analysts. “Any further increase in crude oil prices to over $75/barrel will put further pressure on India’s macroeconomic position. A $10/barrel increase in oil prices impacts India’s CAD (current account deficit) by around $15 billion(50 bps of GDP)," Kotak Institutional Equities said in a note.
4) Most Asian currencies are also trading weak against the US dollar. IFA Global expects to remain in the range of 68.00-72 over next three months.
5) Long positions were seen receding in the Indian rupee, according to a Reuters poll. A spike in oil prices has weighed on the rupee, which was Asia’s best-performing currency in the past three months. (With Agency Inputs)