MUMBAI, Oct 3 (Reuters) – The Indian rupee fell for a fourth consecutive session on Thursday, logging its worst day against the dollar in two months, pressured by a decline in regional currencies and an uptick in crude prices amid intensifying Middle East conflict.
The rupee ended at 83.9675 against the U.S. dollar, down from 83.82 in the previous session.
The domestic currency fell to an intraday low of 83.97 during the session, just shy of its record low of 83.9850, hit last month.
“While the 84 level is expected to act as a strong support for the Indian currency, any escalation in geopolitical conflict or a significant surge in oil prices could push the rupee to a new record low,” said Sugandha Sachdeva, founder of SS WealthStreet, a New Delhi-based research firm.
Significant foreign portfolio outflows from Indian markets have also weighed on the rupee, Sachdeva said.
However, the Reserve Bank of India is unlikely to “loosen its grip” and will intervene if the rupee edges past 84 against the dollar, “in quick succession,” a trader with a private bank said.
Most Asian currencies slipped on Thursday, with the Thai baht, Malaysian ringgit and the Indonesian rupiah down about 1% each versus the dollar.
Prospects that the Federal Reserve was not likely to be in a rush to cut interest rates coupled with a volatility in oil prices amid the Middle East conflict lifted the safe-haven dollar’s appeal.
“Markets are awaiting Israel’s retaliation against Iran, which should determine whether oil goes higher,” ING Bank said in a note.
The dollar is “in a solid position,” ING said.
U.S. private payrolls increased more than expected last month, spurring expectations for a robust reading on the monthly nonfarm payrolls figures on Friday.
The odds of a 50-basis-point U.S. rate cut in November are currently at about 36%.
Sign up here.
Reporting by Siddhi Nayak; Editing by Eileen Soreng
Our Standards: The Thomson Reuters Trust Principles.
