Rupee slips to fresh all-time low in 3rd straight session, closes 77.58/$

The rupee hit a fresh all-time low closing against the dollar on Wednesday as it ended the day at 77.58/$ — down marginally from Tuesday’s close of 77.56/$ — which was the previous all-time low. After a flat opening, the rupee traded in a narrow range and fell to 77.61/$ to hit the day’s low.

“The USD-INR pair settled slightly higher, tracking firmness in the dollar index, on expectations of a more aggressive policy tightening by the Federal Reserve. The strong dollar and elevated crude prices also supported dollar demand today,” IFA Global said in a note.  

Dealers said major gains for the dollar were capped as the Reserve Bank of India is believed to have protected the 77.50 levels.

The rupee has come under pressure since the Russian invasion of Ukraine, which resulted in a surge in commodity prices. The US Federal Reserve adopted a hawkish stance to tackle inflation which led investors flee from emerging markets to safe haven assets.

“Comments from the Fed governor suggest that rate hike trajectory could continue in the coming meeting as well,” said Gaurang Somaiya, Forex & Bullion Analyst, Motilal Oswal Financial Services.  “We expect the USDINR to trade sideways and quote in the range of 77.05 and 77.80,” Somaiya added.

The British pound fell against the US dollar after the UK inflation rose to a 40-year high of 9 per cent in April.

The dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.3 per cent higher at 103.59 intraday.