Business Recorder
MUMBAI: The Indian rupee is expected to extend its weakness on Tuesday, potentially slipping to an all-time low, amid high oil prices that have been a persistent drag for several weeks. Weakness in Asian peers amid subdued risk appetite and high U.S. yields is set to add to the pressure on the currency. The rupee is expected to open in the 96.35-96.40 range, traders said, after settling at 96.3450 on Monday, when it hit a lifetime low of 96.3875. “Another day, another new high (on dollar/rupee). For the moment, it simply seems that the ongoing cycle (of rupee weakness) can’t be halted,” a currency trader at a bank said. “Obviously, that can’t be.” What’s needed is a meaningful shift in the underlying drivers, either a correction in oil prices that hasn’t materialised or concrete steps to boost dollar inflows, he added. The rupee is on a seven-day losing streak, shedding 2.2% and hitting new lows. It has fallen more than 6% since the Iran war began in late September. Brent crude was hovering near $110 a barrel in Asia trading, with investors weighing whether the U.S. and Iran will reach an agreement to halt the war and reopen the Strait of Hormuz. U.S. President Donald Trump said he had paused a planned attack on Iran to allow for negotiations, providing slight relief. Still, risk appetite remained subdued, with U.S. equity futures sliding and Asian equity markets declining. The weak sentiment weighed on Asian currencies. Asian units are further having to contend with a recent rise in U.S. Treasury yields, with investors pricing in the prospect of oil prices remaining higher for longer, potentially fuelling inflation. Meanwhile, India raised petrol and diesel prices by about 0.9 rupees per litre on Tuesday, fuel retailers in Delhi said, marking the second such increase in a week.
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