The partially convertible rupee closed down 0.1% at 79.74 per dollar, recouping some of the day’s losses when it had hit an over one-week low.
Reuters
September 16, 2022 / 03:57 PM IST
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The Indian rupee marked its worst week in five on Friday, as risk sentiment was hit by the Chinese yuan weakening past 7 per dollar to breach a key psychological level for the first time in two years.
The partially convertible rupee closed down 0.1% at 79.74 per dollar, recouping some of the day’s losses when it had hit an over one-week low. For the week, the rupee declined 0.2%, its biggest loss since the week ended Aug 12.
A foreign exchange trader said market participants were wary that the rupee had not been allowed to weaken past 80 per dollar and saw it as a level to protect.
Traders were likely unwinding long dollar positions and creating fresh shorts, he added.
Asia’s economic engine China saw its yuan fall to 7.0166 due to a buoyant dollar and a slowing domestic economy, which had a cascading effect on its regional peers due to their close trade relationship. [CNY/]
A slew of data from China came in mixed, as industrial output beat forecasts but property investment continued to decline considerably.
Several Asian currencies hit multi-year lows, while stocks sold off. Indian equities plummeted 2%.
Meanwhile, unexpectedly strong U.S. data overnight added to the case that the economy could tolerate higher interest rates, sparking a sell-off in Treasuries and making the greenback even more attractive to hold.
The dollar index rallied 0.4% to 110.13, not far from its two-decade high of 110.79 reached earlier this month.
Traders now shift their focus to a slew of monetary policy meetings by the Federal Reserve, the Bank of Japan, and the Bank of England next week, with the Fed meeting taking centre stage.
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