Rupee weakened to a record low of Rs 87.54 against the US Dollar after opening.
The local currency had opened 5 paise lower at 87.51 against the greenback. It closed at 87.46 on Wednesday. And the Brent crude oil was at $74.78, up 0.23%.
“The Indian rupee made a record low of 87.4975 yesterday as market anticipated that RBI may slash interest rates on Feb. 7, 2025. Widespread stoploss were triggered, further exacerbating the currency weakness. This is despite Asian currencies gaining yesterday and a softer dollar index and US yields. The rupees slide invoked investor concerns as significant dollar buying by foreign banks and oil companies contributed to the weakness,” said Anil Kumar Bhansali, head of treasury and executive director of Finrex Treasury Advisors LLP.
Bhansali expects the rupee to trade in Rs 87.30 to 87.60 range on Thursday, with exporters on the watchful side for hedging.
US Dollar Index stood at 107.6660 and was 0.08% up.
“The US dollar slumped to a eight-week low against the Yen at 152.02, while it remained range bound against other majors. Sterling was at one-month high against the dollar at 1.2507. The Euro was more in a small range at 1.0403, though it has risen from a low of 1.0228 when Trump slammed 10% tariffs against China. The dollar index in itself was at 107.55, while US 10-year yields fell to a low of 4.4150%,” said Bhansali.
US ISM Services PMI disappointed, signaling weaker-than-expected service sector growth and moderating price pressures. Traders priced in a 25 bps interest rate cut by the BoE today, according to Kunal Sodhani from FX Hub.
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