Rupee Significantly declines, with 80 per dollar just around the corner

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Rupee Significantly declines, with 80 per dollar just around the corner

The dollar achieved a record two-decade high on Wednesday, propelled by the anticipated Fed liftoff and flows into safe-haven assets as Russia warned of intensifying its war operations against Ukraine. The rupee plunged, ending the day below 80 per dollar after briefly touching that level.
According to Bloomberg, the rupee was last seen trading at 79.9788, down from its previous close of 79.7563 and an intraday low of 80.0137.

According to Reuters, the Indian rupee’s closing value versus the US dollar on Wednesday was its lowest. According to Reuters, the rupee began slightly lower at 79.79 and remained somewhat lower during the session until closing at 79.9750 per US dollar, down from 79.75 in the previous session.

However, PTI said the local currency declined 26 paise to settle at 80.00 versus the US dollar tentatively.

The market’s reaction to Vladimir Putin’s comments and predictions that the US Fed was getting ready to raise interest rates again quickly caused the rupee to plummet simultaneously as the dollar soared to a new 20-year high.

Vladimir Putin, the president of Russia, reportedly issued the nation’s first call to mobilize since World War Two, warning the West that if it continued its “nuclear blackmail,” Moscow would react with the full force of its powerful weapons.

That information caused the dollar index, which measures the dollar’s performance against a basket of currencies, to increase by more than 0.5% to 110.87, a record high since 2002.

As a result of Putin’s comments, European currencies were heavily sold on foreign currency markets, which heightened concerns about the economic prospects for a region already severely hindered by Russia’s limits on gas delivery to Europe.

The euro hit a two-week low of $0.9885 and is now getting close to the two-decade lows touched earlier this month. It was recently down 0.6%, at $0.9912.

Kenneth Broux, a currency analyst at Societe Generale, told Reuters that “the headlines about Russia are, at least temporarily, taking the thunder from the Fed.”

“The euro is suffering due to worries about the conflict’s potential to escalate. Additionally, the losses may escalate if the Fed expresses hawkish sentiment tonight.”

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