Considering the extent of bad news, it is surprising that the rupee is still holding on the stronger side of 80, a currency trader at a private bank said. “It is quite clear that the markets still see 80 as a level that the RBI will want to defend.”
The Indian rupee slipped to a four-week low against the dollar on Monday as the euro and the Chinese yuan extended losses. The rupee dropped to 79.9125 per U.S. dollar, lowest level since July 27, compared with 79.7750 in the previous session.
Euro falls to as low as 0.9988 to the dollar, weighed down by concern that a three-day halt to European gas supplies later this month will exacerbate an energy crisis. Offshore Chinese yuan slipped to a two-year of 6.8621 to the dollar after the country’s central bank cut key lending rates.
Selloff in Indian shares adds to rupee’s woes. The BSE Sensex down 1.2%. U.S. equity futures slip 1.1%. U.S. interest rate outlook concerns sap risk appetite. Odds of 75 basis points rate hike by Federal Reserve climb to almost 50%.
Considering the extent of bad news, it is surprising that the rupee is still holding on the stronger side of 80, a currency trader at a private bank said. “It is quite clear that the markets still sees 80 as a level that the RBI will want to defend.”
