Rupee Hits Fresh Low Against US Dollar For Third Straight Session

On Wednesday, the rupee hit a record low for a third straight session as foreign investors continued to sell riskier assets ahead of US inflation data, which might influence the speed at which monetary policy is tightened in the largest economy in the world.

The rupee was trading at 79.66/67 per dollar compared to its previous close of 79.59. The unit touched a life low of 79.6675.

The increase of the safe-haven dollar has put tremendous pressure on Asian currencies in recent months, which is mostly due to anticipation that the US Federal Reserve will raise interest rates faster and more aggressively than its competitors.

The rise in the dollar index is mostly due to the Euro's weakening, with investors being drawn to the US dollar amid concerns about other economies' growth. Amid worries that an oil crisis could push Europe into recession, the euro fell to a 20-year low, trading at parity with the dollar.

"The rupee is expected to appreciate today amid retreat in US dollar and sharp decline in crude oil prices. However, sharp gains may be prevented on risk aversion in the global markets and persistent FII outflows. Further, India's CPI data showed inflation remained above 7% for a third consecutive month and stayed higher than RBI's comfort zone. Additionally, investors will focus on inflation number from US that could influence Fed's path for interest rate increases. US$INR (July) is expected to trade in a range of 79.40-79.85," ICICI Securities said.