The US dollar index, which compares the value of the dollar to that of six important developed market currencies, reached a new high for the year of 106.20 during Asian trading hours, although it was last quoted 0.06% higher at 105.94.
Due to a stronger US dollar abroad and a rise in US Treasury yields, the Indian rupee ended the day on Tuesday 8 paise weaker than the US dollar. When compared to the previous closing of 83.15, the local currency completed the day at 83.23 per dollar.
The US dollar index, which compares the value of the dollar to that of six important developed market currencies, reached a new high for the year of 106.20 during Asian trading hours, although it was last quoted 0.06% higher at 105.94.
The US 10-year Treasury yield surged to the highest since October 2007 in Asia trade and was last quoted at 4.51%, amid rising fears that the US Federal Reserve will keep interest rates up for longer.
The rupee decreased 21 paisas to 83.15 per dollar on Monday.The US Federal Reserve may need to hike rates further given the resiliency of the economy, Minneapolis Federal Reserve Bank President Neel Kashkari said on Monday.
Dilip Parmar, a foreign exchange research analyst at HDFC Securities, said that the rupee will continue to trade “sideways with a bearish bias”.
“But if equity inflows don’t return next month, then it could be a problem,” he continued.
For additional hints on the Fed’s policy actions, investors are now awaiting US Q2 GDP data and core personal consumption expenditure inflation figures due later this week.The rupee’s decline was nevertheless restrained by falling crude oil prices.
While US West Texas Intermediate (WTI) crude fell 0.88% to $88.89 per barrel, Brent futures dropped 0.83% to $92.52 per barrel.
On the domestic front, the Indian stock market indices ended marginally lower tracking weak global cues amid concerns over interest rates staying high for an extended period and its impact on the global economy.
The Sensex concluded 78.22 points, or 0.12%, lower at 65,945.47, while the Nifty 50 slid 9.85 points, or 0.05%, to settle at 19,664.70.
According to preliminary data posted on the exchanges, foreign institutional investors (FIIs) net sold Indian shares worth $2,333.03 crore on Monday, while domestic institutional investors (DIIs) net bought shares worth $1,579.28 crore.
