Rupee closes at new low of 78.07 against US Dollar
The rupee on Wednesday closed at a new all-time low of 78.07 against the US dollar amid tepid equity markets and persistent foreign fund outflows, even as participants nervously eyed an interest rate decision of the US Federal Reserve later in the evening.
At the inter-bank foreign exchange market, the local currency opened firm at 77.99 and came under pressure to again fall below the 78 mark.
It touched an intra-day low of 78.09 to the greenback and finally settled at 78.07 against the previous lifetime closing low of 78.04.
There was little to cheer for the unit as the benchmark index settled over 152 points lower at 52541.39 and provisional data showed foreign portfolio investors selling stocks worth Rs 3,500 crore during the day’s trade.
However, the main focus of attention was the Fed’s decision that wound up a two-day meeting on Wednesday. With May CPI inflation coming in more than expected at 8.6 per cent, market participants are gearing for a 75 basis point hike in interest rates from the US central bank.
They are also keenly watching its guidance with analysts not ruling out aggressive rate actions in the future that includes another 75 basis point increase in its July meeting.
“The markets now seem to be factoring in a 75 basis points hike by the US Fed today. Traders are currently pricing in a more than 90 per cent chance of a 75 basis point hike, according to CME’s Fed Watch Tool.