According to analysts, apart from a strong dollar, weakness in the domestic bourses along with persistent outflow of foreign funds continued to dampen the domestic currency.
After closing at a record low level of 69.05 on Thursday, the Indian rupee slid further by 7 paise to a fresh low of 69.12 against the greenback in early trade on Friday. Sentiments were hurt by the US dollar strengthening to its highest level since July 2017 after Federal Reserve Chairman Jerome Powell expressed confidence in the U.S. economy and affirmed expectations that the central bank was on track to keep hiking interest rates gradually. On Friday, the dollar index against a basket of six major currencies stood little changed at 95.178 after being knocked down from 95.652.
According to analysts, apart from a strong dollar, weakness in the domestic bourses along with persistent outflow of foreign funds continued to dampen the domestic currency. During the week from July 16-19, FIIs have off-loaded funds worth Rs 1,615.36 crore in the domestic markets.
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“Rupee continued its downfall following the weakness in the domestic bourses, which was weighted down by the political developments and negativity in the global peers; ended at a record low of 69.05 yesterday. Last time, currency touched an all-time closing low of 68.9413 on July 05. Yesterday, it opened at 68.68 a dollar and touched a low of 69.07 a dollar,” Geojit Financial Services said in a note.
“Political tensions in domestic space weighted down the markets as a no-confidence motion against the ruling party is scheduled today. Apart from this firm oil prices and continued capital outflows also dampened the sentiments. As Rupee breached the 69 mark, more weakness is expected while on flip side 68.2 will be a major level to watch,” it noted.