The Indian rupee recorded a new low at the close of trading on Friday, influenced by a decrease in the Chinese yuan. This marked the rupee's ninth consecutive week of losses, driven by the ongoing strength of the U.S. dollar. The rupee concluded the trading session at 85.77 against the dollar, slightly down from its previous close. Over the week, the local currency depreciated by 0.2%.
In China, the yuan crossed the significant 7.3 mark, reaching a 14-month nadir versus the dollar, amid declining yields, anticipation of rate cuts, and potential tariffs from the future administration of U.S. President-elect Donald Trump. The yuan ended the onshore trading at 7.3093, its lowest since November 3, 2023, affecting other Asian currencies as well. "A slide in the yuan exacerbated the rupee's woes," noted a trader from a private bank.
Market participants speculate that the Reserve Bank of India's (RBI) interventions, likely through dollar sales, have so far prevented a further slide in the rupee beyond its recent record low. Looking ahead, investors' focus shifts to the upcoming U.S. jobs report and inflation data, with expectations that the rupee might approach the 86-per-dollar level in the short term. Jigar Trivedi, a senior analyst at Reliance Securities, advises purchasing the dollar-rupee pair on dips.
Source: Reuters