Rupee on the verge of 80 per US dollar, at a record low for the fifth consecutive day

Analysts said red-hot inflation data in the US raised the case for a full percentage point rate hike at the Fed’s meeting later this month, echoing the Fed chairman’s stance that inflation should be brought down as quickly as possible. . Data released Wednesday showed US annual consumer prices rose 9.1% in June, the most in four decades, topping expectations for an 8.8% increase. The Fed has already raised rates three times this year.

“Aggressive policy course by the US Fed to contain rising price pressures is raising fears of a weak growth outlook and is leading to risk aversion in the markets. In addition, we have seen a steady rise in the dollar index, while the euro has been hit hard as it fell below parity against the dollar for the first time in nearly 20 years. Europe is grappling with energy supply crunch due to sanctions on Russia, which makes it more vulnerable to recession risks,” said Sugandha Sachdeva, Vice President – Commodity and Currency Research, Religare Broking Ltd.

“This has led to a major moment depicting strength in the greenback as markets are expecting the US Fed to raise rates more rapidly than its peers. Going forward, it remains to be seen whether the euro can maintain its level of psychological parity and regain some lost ground. All eyes will now be on the next week’s ECB meeting and this will give more clues about the rupee-dollar exchange rate. Keeping in view the macroeconomic background, the Indian Rupee is eyeing the 81-dollar mark in the near future.”

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