In spite of a team of officials from the US being in India for talks on the proposed India-US trade deal, continuing uncertainty over the prospects of its finalisation pressured the rupee to close at an all-time low of 90.33 (provisional) against the US dollar on Thursday, after having declined 39 paise.
Forex traders said the rupee is expected to trade with a negative bias as the delay in the conclusion of the deal between the two countries continues to dent investor confidence, especially after Chief Economic Advisor V Anantha Nageswaran reportedly said the India-US trade deal is likely to be inked by March.
Additionally, prevailing risk-averse market sentiment and sustained foreign fund outflows weighed on the local unit.
At the interbank foreign exchange, the rupee opened at 89.95 against the US dollar, then lost ground and fell to a record intra-day low of 90.48, registering a 54-paise decline from its previous close.
At the end of Thursday’s trading session, the domestic unit was quoted at 90.33 (provisional) against the American currency, down 39 paise over its last close. On Wednesday, the rupee depreciated 7 paise to close at 89.94 against the US dollar.
Also Read: USD-INR swap auction of $5 bn on Dec 16
“Indian rupee hit a fresh all-time low amid uncertainty over the India-US trade deal. However, positive domestic markets and a weak US Dollar cushioned the downside,” said Anuj Choudhary, Research Analyst, MiraeAsset ShareKhan.
“We expect the rupee to trade with a negative bias as delay in trade deal between India and US may continue to dent the domestic currency,” Choudhary said, adding that any intervention by the central bank may also support the rupee at lower levels.
“Any intervention by the central bank may also support the rupee at lower levels. USDINR spot price is expected to trade in a range of 90.10 to 90.75,” he added.
Meanwhile, US Trade Representative (USTR) Jamieson Greer has said the US has received the “best” ever offers from India on the proposed trade agreement amid commencement of two-day talks here between the two countries.
Speaking at a Senate Appropriations Subcommittee hearing on Tuesday in Washington, Greer said there is resistance in India to certain row crops and other meat and products. Row crops in the US include corn, soybeans, wheat, and cotton.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.18 per cent lower at 98.61, after the FED cut rates and gave a not-so-hawkish guidance.
Brent crude, the global oil benchmark, was trading 1.25 per cent lower at USD 61.43 per barrel in futures trade.
On the domestic equity market front, the 30-share benchmark index Sensex jumped 426.86 points to settle at 84,818.13, while Nifty climbed 140.55 points to 25,898.55.
Foreign institutional investors sold equities worth ₹1,651.06 crore on Wednesday, according to exchange data.
Follow us
