Rupee falls 2 paise to settle at an all-time low of Rs 83.27 per US dollar

The Indian rupee fell 2 paise to settle at an all-time closing low of Rs 83.27 per US dollar on Monday, tracking the rise in the dollar index, according to dealers.

The rupee had settled at the same level on September 18.

“On Monday, the rupee tracked the dollar index, but it was moving in a narrow range because the US and Japan markets were closed,” a dealer at a state-owned bank said. “The rates might change because of war, but that will be known on Tuesday,” he added.

The US market was closed on Monday on account of Columbus Day.

The dollar index, which measures the strength of the greenback against a basket of six major currencies, rose to 106.45 as the dollar surged on the safe-haven demand due to geopolitical tensions in West Asia.

Market sentiment turned highly delicate following intense clashes between Israeli forces and gunmen belonging to the Palestinian group Hamas over the weekend. These clashes occurred shortly after militants launched a devastating attack on Israel, marking the deadliest day of violence the country had witnessed in half a century.

Additionally, US nonfarm payroll data came in stronger than expected. In September, nonfarm payrolls surged by 336,000 jobs, surpassing market expectations of 170,000 jobs.

The data for August was revised upward, revealing the addition of 227,000 jobs instead of the previously reported 187,000.

The local currency had depreciated by 1.2 per cent between July and September. On the other hand, it witnessed a 0.2 per cent appreciation in the first quarter. Moreover, it appreciated by 0.16 per cent in the first six months of the current calendar year, thanks to robust foreign inflows.

Market participants expect the local currency to trade between Rs 83.2 to Rs 83.4 a dollar on Tuesday, as US yields and the dollar index may continue to rise.

“On Tuesday, the rupee is expected to remain in the range of Rs 83.2 to Rs 83.4 with firm dollar expectations as the dollar index and US yields continue to rise. Asian currencies were stable for the entire day as foreign portfolio investors continue to remain sellers, having sold $2.5 billion of stocks in the last 15 days," Anil Kumar Bhansali, head of treasury and executive director at Finrex Treasury Advisors LLP, said.

The minutes of the US Federal Reserve Open Market Committee’s meeting scheduled to be released on Wednesday are also being closely watched, according to dealers.