The Indian rupee fell to a new record low beyond 78 against the US dollar today after red-hot US inflation data raised the prospects of aggressive Fed tightening later this week. The dollar was stronger on haven demand amid rising costs and slower growth. The Indian rupee touched a lifetime low of 78.28 to the dollar while the benchmark 10-year bond yield hit 7.60%, its highest since Feb. 28, 2019.
The Sensex was down about 1,500 points amid a selloff global markets.
Asian stocks dropped over fears that the Fed would tighten policy on Wednesday, after data last week showed the U.S. consumer price index hit its highest in over 40 years last month.
“The dollar index rose last week after the U.S. consumer price inflation surged to fresh 40 year highs and reached 8.6% on yearly basis. The dollar index crossed 104 marks once again while the U.S. 10-year benchmark bond yields crossed 3.15% levels. The Japanese yen and euro slipped to record lows against the dollar. The euro also slipped after ECB downward economic growth for the year 2022-23 and gave a signal for raising interest rates. We expect the dollar index to remain firm this week and could test 104.80 levels again,” said Rahul Kalantri, VP Commodities, Mehta Equities Ltd.
