Home Business Rupee falls sharply from $81.90 to $81.52 weighing on as oil bounces

Rupee falls sharply from $81.90 to $81.52 weighing on as oil bounces

The rupee fell sharply to 81.90 per dollar, against its 81.95. not far from the record low of

The rupee fell sharply to near its record low on Thursday as oil prices rose and renewed worries about the country’s external deficit, even as the dollar edged ahead of US jobs data. softening, which may provide some insight into the path of interest rate hikes.

PTI reported that the domestic currency fell 28 paise to temporarily close at 81.90 against the US dollar.

Bloomberg showed that the rupee was last turning around at 81.90 per dollar, which was not from its record low of 81.95 compared to its previous close of 81.52 on Tuesday.

The forex market was closed on Wednesday on account of Dussehra.

On Wednesday, a cartel of oil producers led by Saudi Arabia agreed to cut production drastically, pushing Brent crude futures to a three-week high of $93.99 a barrel.

This rise in crude oil prices will add to the country’s woes of inflation and a rising current account deficit (CAD) as India imports more than 80 per cent of its oil needs.

“Oil is up after yesterday’s production cut… from about $83 a barrel last week to about $94 today. Oil is the main concern for our trade deficit and has increased our CAD by 2.8 percent. About 3.5 percent could do it.” In the coming quarters,” said Anil Kumar Bhansali, Head of Treasury at Finrex Advisory Services.

“Today, the demand for $ has been mainly due to purchases by oil companies,” he said.

Even as the dollar fell against a basket of major currencies on Thursday after rising 0.7 percent the previous day, its biggest single-day jump in a week.

The greenback, which has been rising this year in an uptrend, fell on Thursday, taking some risk and helping the commodity complex, where oil was trading near its highest level in three weeks.

The Federal Reserve’s intention to sharply raise interest rates to combat inflation is still seen as the main gainer from Friday’s jobs report, which has been backed overnight by several central bank officials.

“Fed officials have been giving a clear message lately on the goal of bringing inflation under control without worrying about turmoil in the domestic economy or global financial markets,” Saxo Bank strategist Charu Chanana told Reuters.

“While two key indicators, Friday’s monthly payroll report and October 13 monthly CPI data, may still distort the market pricing of the Fed’s message, making the Fed’s job much harder.”

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