The US dollar is displaying its might in the currency market, dragging the Indian rupee to new lows. The rupee fell to an all-time low of 88.78 on Tuesday and is down 3.13% year-to-date. For a year, the INR has plunged 5.89% exhibiting weak fundamentals, and has plummeted 18% since 2020.
The fall comes even after the DXY index, which tracks the performance of the US dollar, is struggling to climb above the 98 mark in the currency market. Even with a weaker dollar, the rupee is failing to take the greenback by its horns. The development indicates that the mighty dollar is ready for a fight even when things are not in its favor.
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Rupee Stands No Chance in the Currency Market Against the Mighty Dollar
Analysts reveal that tariffs, trade wars, and the recent H1B visa issue are making the rupee walk on a tight rope against the mighty dollar. The overall weakness in the crude oil sector is also among the reasons for its decline in the currency market. A handful of Asian currencies are on the back foot this year vs the USD.
“We expect the rupee to remain weak as the US visa fee hike issue may continue to dampen domestic market sentiments and may result in foreign outflows. However, overall weakness in global crude oil prices may support the domestic currency,” said Anuj Choudhary, Research Analyst, Currency and Commodities, Mirae Asset ShareKhan.
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Choudhary forecasted that the mighty dollar could rise to 89.20 against the rupee in the currency market. “Traders may take cues from PMI and current account balance data from the US. Traders may also take cues from US President Donald Trump and Fed Chair Jerome Powell’s speech,” he said. Other currency analysts predict that the INR could dip to the 90 level against the USD next.