Rupee slips to fresh low as traders turn focus to US CPI; ends at 88.44/$

Indian Rupee today: The domestic currency closed 34 paise lower at a new low of 88.44 against the greenback on Thursday

The Indian Rupee extended losses to hit a fresh low on Thursday as concerns of US tariffs on the country continued to weigh on traders' sentiments. 

 

The domestic currency closed 34 paise lower at a new low of 88.44 against the greenback on Thursday, according to Bloomberg. So far this year, the rupee has depreciated 3.2 per cent, making it the worst performer among Asian peers.

 

India and the US are working to conclude negotiations on a bilateral trade deal, but uncertainty still continues to prevail till the time anything firm is out, Kunal Sodhani, head - treasury at Shinhan Bank, said. The Reserve Bank of India (RBI) has not been eyeing any level but to curb any kind of excess or unforeseen volatility, he said. "For USDINR, 87.85 acts as an important support while 88.80 levels may be tested."

 

   

Foreign Portfolio Investors (FPIs) turned net sellers in Indian equities worth ₹115.69 crore on Wednesday. So far this year, FPIs sold equities worth ₹1.4 trillion, according to NSDL.  

 

Despite the recent pressure, analysts at YES Securities see limited downside in the domestic currency from current levels. "Indian rupee's slide past the 88-mark largely reflects US tariff-driven sentiment rather than a deterioration in India’s underlying fundamentals, suggesting limited room for further depreciation," the brokerage said. 

 

"This suggests the rupee is not structurally overvalued and may even be on the brink of undervaluation after August's steeper fall against the basket of currencies," YES Securities said.

 

The dollar slightly rose after the US producer prices unexpectedly declined for the first time in four months in August. The dollar index, a measure of the greenback against a basket of six major currencies, was up 0.20 per cent at 97.97. 

 

Investors await CPI, initial jobless claims data, and the Federal Budget balance from the US. The Core CPI in the US, a measure of underlying inflation excluding food and fuel, is expected to rise 0.3 per cent for a second month, according to Bloomberg. In the Euro area, the ECB's decision on the interest rate is awaited.

 

In commodities, Brent oil prices were trading lower after a three-day gain amid mixed signals from global supply and geopolitical risks. Brent crude price was down 0.27 per cent at 67.31 per barrel, while WTI crude prices were lower by 0.38 per cent at 63.43 per barrel, as of 3:30 PM IST.