Rupee falls 2 paise to all-time low reaching 84.40 against US dollar in early trade

Rupee fell 1 paisa reaching a new lifetime low of 84.39 against the US dollar on Tuesday amid continuous FII outflows. According to forex traders, in the medium term, Rupee is likely to soar somewhere between 83.80 and 84.50, with RBI limiting any major downside with the help of its foreign exchange reserves.

During the session, the local currency reached a high of 84.39 and a low of 84.41. It finally closed at 84.40 (provisional), marking a slight decline of 1 paisa against the US dollar continuing losses for the fifth consecutive session.

On Monday, the rupee fell by 1 paisa, reaching a low of 84.38. Over the past five sessions, the local currency has registered a depreciation of 32 paise against the greenback.

Jateen Trivedi, VP Research Analyst, Commodity and Currency, LKP Securities, said, "The rupee traded weaker as foreign funds continued their selling spree in the Indian market. However, the rupee received some relief from falling crude and gold prices, as the reduced pace of decline could potentially improve India's import bill in the coming months."

Despite this, the dollar index’s strength is expected to continue exerting pressure on the rupee, limiting any possible recovery in the near term.

Trivedi highlighted that at present rupee is facing resistance in the 84.25-84.30 range, with support seen lower at 84.55. He added that this week’s focus will be on the release of the US CPI data, which could impact the dollar's trajectory. Additionally, US Fed Chair Jerome Powell's upcoming speech is expected to provide key insights that may drive dollar price movements, with the currency currently trading at a four-month high of 105.75.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.06 per cent higher at 105.60.

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