The rupee on Friday plunged 37 paise to 74.89 against the dollar as a massive sell-off of shares, amid concerns over a new variant of Covid and capital outflows, hit currency market sentiment.
The dollar index, which measures the strength of the greenback against a basket of six currencies, was trading down 0.34% at 96.44. If capital outflows continue, the rupee is expected to hit the 75 mark.
“It was the widespread strength seen in the dollar index and the massive selling seen in national stocks that pushed the local unit to three-week lows,” said Sugandha Sachdeva, vice president of research at commodities and currencies, Religare Broking.
The US dollar rose sharply to its highest levels of the year as markets anticipate the US Fed will accelerate asset reduction and raise interest rates around mid-2022, with inflation hitting lows. levels never seen in decades. In addition, concerns about the new variant of the highly mutated coronavirus and fears of lockdown in Europe weigh on sentiment.
The dollar has risen about 1% this week, mainly due to weak market sentiment and REIT outflows, especially after news of the detection of a new variant was announced, an Emkay Global Financial analyst said. Services. Meanwhile, gold prices have surged, following a global rally in the precious metal as concerns over a new variant of Covid have heightened the metal’s appeal as a safe haven.