The dollar hit a fresh four-month high to the euro on Thursday as the U.S. pandemic response continued to outpace Europe’s, which has been hobbled by extended lockdowns and delayed vaccine rollouts.
Indian rupee is trading lower at 72.65, amid selling seen in the domestic equity market.
It opened 13 paise lower at 72.69 per dollar against previous close of 72.56.
At 13:01 IST, the Sensex was down 841.97 points or 1.71% at 48338.34, and the Nifty was down 253.50 points or 1.74% at 14295.90.
The US dollar hit fresh highs for 2020 on Wednesday as concerns over a third COVID-19 wave in Europe, potential US tax hikes and escalating tensions between the West and China helped it to move higher, said ICICI Direct.
The news is offsetting a dip in US Treasury yields. The dollar-rupee March contract on the NSE was at Rs 72.69 in the last session. The open interest declined by almost 7.3% for the March series while it increased by more than 12% in April series, it added.
Oil prices skidded around 2% as fuel demand concerns re-emerged alongside fresh coronavirus pandemic lockdowns, trimming overnight gains spurred by the grounding of a giant container ship blocking crude shipments through the Suez Canal.
The dollar hit a fresh four-month high to the euro on Thursday as the U.S. pandemic response continued to outpace Europe’s, which has been hobbled by extended lockdowns and delayed vaccine rollouts.
“The coronavirus fears are resurfacing as cases have started to tick up all over the world. This is dampening the reopening and recovery optimism and will keep the safe-haven dollar demand intact. However, there is IPO euphoria in the market which is keeping the spot below 73 levels,” said Rahul Gupta, Head Of Research- Currency, Emkay Global Financial Services.
“Until the spot is trading below 73 zone, the trend will be bearish, with crucial support being 72.25,” he added.
