As for the domestic currency, since it has breached the crucial support of the 74.90 mark, we envisage it to drift lower towards 75.50 in the near- term, says Sugandha Sachdeva, VP- Commodity & Currency Research, Religare Broking.
Indian rupee is trading flat at 74.88 per dollar, amid selling seen in the domestic equity market.
It opened lower at 74.95 per dollar against previous close of 74.87.
The Sensex was down 479.62 points or 0.91% at 52,073.78, and the Nifty was down 159.50 points or 1.01% at 15,592.90.
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Oil prices stabilised on Tuesday after slumping around 7% in the previous session amid a broader market retreat led by concerns about a resurgence of COVID-19 infections, which came just as producers inked a new supply deal.
“The Indian rupee has slipped lower to test three-month lows in line with the sell-off witnessed in the domestic as well as global equities. The sentiments have soured amid the rising spread of the highly contagious Delta variant of the COVID-19 virus, which is likely to hold back the pace of global economic recovery,” said Sugandha Sachdeva, VP- Commodity & Currency Research, Religare Broking.
“Besides, the current burst of high inflation seems to be more persistent, rather than ‘transitory’ as the Fed thinks. This is leading the investors towards the safety of the greenback which is trading near its highest level in months.”
“As for the domestic currency, since it has breached the crucial support of the 74.90 mark, we envisage it to drift lower towards 75.50 in the near- term,” she added.
Safe-harbour currencies like the Japanese yen and U.S. dollar held near multi-month highs against the riskier Australian dollar and British pound on Tuesday, as fears grow that a rampant coronavirus variant could upend the global economic recovery.
Gold prices were flat on Tuesday, as a slide in U.S. Treasury yields offset a firmer dollar amid investor concerns over a relentless surge of the Delta coronavirus variant that could threaten the outlook for global economic recovery.
