The Indian rupee continues its downturn, dropping to 92.01 against the US dollar. Growing market uncertainty and global disorder are also weighing on the Indian markets, triggering multiple outflows, which have weakened investors’ faith in the Indian currency.
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INR Falls To 92.20 Against The US Dollar
The Indian rupee has been undergoing various transformations this past year. The Indian currency has fallen to an all-time low of 92.01 against the US dollar, triggered by growing FII outflows and oil price spikes due to the closure of the Strait of Hormuz. Per the latest report by The Hindu, weak FII outflows and domestic market sentiment also weighed in on the INR, triggering a sharp plunge against the US dollar at press time. INR is currently trading at 92.20
“The rupee declined on weak domestic markets and overnight recovery in crude oil prices. Risk-off sentiments in the global markets and FII outflows may continue to weigh on the rupee. Markets will also watch out for geopolitical developments in West Asia. Traders may take cues from CPI data from the U.S. USD-INR spot price is expected to trade in the range of 91.70-92.40, “Anuj Choudhary, Research Analyst, Mirae Asset ShareKhan, said.
Why Is the US Dollar Surging?
The global markets at the moment are witnessing a strange market phenomenon. War-driven economies usually have favoured assets like goldfavored and silver as ultimate safe haven assets. But as the US-Iran war continues to evolve, expectations regarding the Fed to keep rates higher to fight inflation are also getting stronger. This has led the war momentum to support the US dollar, instead of gold, favoring the American currency above all else.
“Those currencies that are larger net energy importers will likely weaken versus those that are not,” Joey Chew, head of Asia FX research at HSBC in Singapore, said.
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