Indian rupee weakens for 11th week in a row as risk aversion continues
By Swati Bhat
MUMBAI (Reuters) -The Indian rupee hit a report low on Friday and weakened for a eleventh straight week as international traders continued to dump riskier property amid rising considerations round a worldwide recession with traders now awaiting the Fed assembly consequence on July 27.
The partially convertible rupee ended buying and selling at 79.8775 to the greenback only a shade weaker than Thursday’s shut of 79.8750. Earlier it hit 79.96, touching an all-time low for the fifth consecutive session.
The rupee has now dropped for 14 of the final 15 weeks.
“We’re simply shy of 80 to the greenback which was a degree individuals anticipated to be hit solely by finish of yr. We may see an extra fall within the rupee until there’s a reversal of international fund flows,” a senior dealer at a personal financial institution mentioned.
Rising market currencies have been on tempo for his or her sixth consecutive week of losses as worries over a possible world financial downturn in addition to sooner U.S. rate of interest hikes dented the attraction for riskier property.
Indian shares ended up 0.7%, however international traders have been dumping home property with yr thus far web gross sales having exceeded $30 billion. [.BO]
Analysts, nonetheless, are predicting a change in fact in international flows, with inventory market valuations wanting pretty enticing after current falls, however the U.S. Federal Reserve’s coverage consequence on July 27 will probably be a key.
Rising rate of interest differentials with the US may immediate extra danger aversion and additional damage the rupee.
Merchants ramped up bets that the Fed would go for a super-sized tightening at its July 26-27 assembly, after knowledge on Wednesday confirmed client worth inflation racing on the quickest tempo in 4 a long time.
However bets have been pared after Fed Governor Christopher Waller and St. Louis Fed President James Bullard mentioned they favored one other 75 bps hike this month.
India’s benchmark 10-year bond yield, nonetheless, continued to rise and closed buying and selling up 5 foundation factors on day at 7.43%.
On the week, the 10-year yield rose 2 foundation factors, snapping three weeks of falls.
(Reporting by Swati Bhat; Enhancing by Amy Caren Daniel, Kirsten Donovan)
