The Indian rupee on Tuesday hit a fresh record low against the dollar as foreign investors continued selling local equities and crude oil rose. A fall to 78.68 against the US Dollar was recorded as the trade opened today.
On Monday, the rupee declined by 4 paise to close at its lifetime low of 78.37 against the US dollar. Fear of a global recession, strengthening the dollar, and continuing foreign fund outflows have kept the domestic currency under pressure for the last few weeks now.
Oil prices rallied for a third day today as major producers Saudi Arabia and the United Arab Emirates looked unlikely to be able to boost output significantly while political unrest in Libya and Ecuador added to those supply concerns. Brent crude futures advanced $1.26, or 1.1%, to $116.35 a barrel, adding to a 1.7% rise in the previous session.
VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said financial markets are trying to gauge the extent of the growth slowdown in the US, which is already underway. “One view is that since the Fed policy will be data-dependent, the Fed might go slow on rate hikes and QT if incoming data allows that. The decline in metal prices is a positive development from this perspective. But Brent crude again rising above $ 116 is negative.”