Rupee falls, knocks at 70/dollar

The US dollar surged to fresh one-year high after the Fed chief’s testimony to the US Senate on Wednesday bolstered the expectations of interest rate hikes, though gradually. Traders and speculators saw no signs of intervention by monetary authorities in

Mumbai, July 19: The rupee on Thursday took a hard 43-paise knock to close below the 69 level for the first time at a historic low of 69.05 against the US currency as upbeat comments on the US economy by the Federal Reserve chairman drove the greenback to one-year high levels higher against global currencies.

This is the biggest single-day fall since May 29 and goes hand in hand with a stronger US dollar.

The domestic currency suffered a major setback as forex sentiment turned wobbled once again with a resurgent dollar and a slew of local issues sparking jitters among investors.

The US dollar surged to fresh one-year high after the Fed chief’s testimony to the US Senate on Wednesday bolstered the expectations of interest rate hikes, though gradually. The two-year Treasury yield was near the multi-year high mark of 2.624 per cent, hitting appeal of emerging market currencies.

Also, Parliament on Friday will debate a noconfidence motion tabled by opposition parties against Prime Minister Narendra Modi’s government, which weighed on forex market sentiment.

Traders and speculators saw no signs of intervention by monetary authorities into the foreign exchange market to support the local currency, pushing the Indian currency down to a low of 69.07 in day trade.

The rupee had touched an all-time low intra-day low of 69.10 on June 28 but had recovered later on suspected intervention from the Reserve Bank.

The market mood has somewhat worsened as China steps up its game against the US after the People’s Bank of China devalued the Yuan once again in what many see as a move against the US.

— PTI