Indian Rupee Hits Record Low of 83.51 Against US Dollar Amid Global Economic Factors

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The Indian rupee opened at a historic low against the US dollar on Tuesday, influenced by a surge in the greenback and elevated US Treasury yields. Beginning at 83.51 against the dollar, the rupee dropped 6 paise from its previous close of 83.45.

The US dollar index, reflecting the dollar’s strength against major currencies, rose by 0.13% to 106.35, driven by optimistic US retail sales data that suggested economic resilience and delayed interest rate cuts by the US Federal Reserve. Additionally, the 10-year US Treasury yield climbed to 4.66%, its highest level since mid-November.

Rahul Kalantri, VP Commodities at Mehta Equities Ltd., highlighted technical indicators indicating the USD-INR pair’s position above its moving average support at 83.36, with the RSI above 50. However, negative MACD divergence suggests potential downward pressure, with significant resistance observed at higher levels.

Support levels for the USD-INR pair are identified at 83.30 – 83.05, while resistance lies at 83.70 – 83.94. Mehta Equities anticipates the pair to fluctuate between 82.74 and 84.10 for the week.

The rupee’s decline was further exacerbated by a surge in crude oil prices, with Brent crude rising to $90.63 a barrel and US West Texas Intermediate (WTI) crude futures reaching $85.94.

Escalating geopolitical tensions in the Middle East following Iran’s attack over the weekend heightened market uncertainties, leading to losses in Asian currencies and equity markets.

In India, sustained foreign fund outflows and weakness in the stock market contributed to the rupee’s downward trend. The Sensex and Nifty 50 indices fell by 0.60% and 0.58%, respectively.

Forex traders noted negative sentiment among investors due to the negative equity trend and continued foreign fund outflows. On Monday, Foreign Institutional Investors (FIIs) sold Indian shares worth ₹3,268.00 crore, while Domestic Institutional Investors (DIIs) purchased shares amounting to ₹4,762.93 crore, according to provisional exchange data.