Mumbai 29 August : Mumbai, Aug 29 : Indian rupee plunged sharply on Monday , and even crossed the mark of 80 against the US dollar following Federal Reserve chair Jerome Powell’s pro-growth speech.at 11 a.m.the rupee traded at 80.04 in comparison to 79.86 closing on the previous session of trading against US dollar.
The rupee fell to an all-time lowest of 80.14 per US dollar in the first few minutes of trading on Monday, in the course of trading as the US dollar index climbed beyond the 109 mark.
The previous low in the lifetime of the rupee was 80.06 per dollar on 19 July.
“The Federal Reserve’s Jerome Powell’s speech that was hawkish has resulted in a bid for the US dollar, making global equity prices lower and bond yields higher.The restoration of price stability will likely require the Fed to maintain a tight policy stance for some time.
Moving forward, it’s evident from both Powell as well as Fed speakers that the next course will be dependent on data,” said Kunal Sodhani Vice President, Global Trading Center, Shinhan Bank.
Friday morning, Federal Reserve Chair Jerome Powell indicated that the US central bank is likely to continue increasing rates of interest and maintain them at a high level to control inflation.
“Restoring price stability will likely require the policy stance as restrictive for a while,” Powell said “The history of the past warns against overly loosening policy.”
In an announcement, CR Forex said: “After the remarks that were hawkish, the probability of Fed’s 75 bps increase in September increased to 70.The market turmoil triggered by Powell’s speech cut the wealth of US billionaires of $78 billion, on the day.In the FX pack US DXY tested 20-year high while euro and pound sank close to their record lows.Asian currencies are trading with losses of 0.30 per centto 0.50 percent.The yuan hit a two-year low, and the rupee is set to hit the record low of 80.10.The most likely interval for today will be 79.70 to 80.30.”
The Dollar index, which measures the power of greenback against a basket of six major currencies was at 109.370.
Sodhani said that in the context of sustained of higher bond yields DXY may be tested at 109.77 levels with EURUSD possibly testing 0.9860 levels, and GBPUSD is moving toward 1.1680 levels.
Brent Crude prices may also to be a bit sticky and not able to sustain lower levels.With these factors in mind, USDINR may find strong support around 79.50 and the break of 80.06 levels will cause options sellers to hit their stops.This will let the USDINR pair advance toward 80.60 levels.
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