Rupee hits lowest-ever level, gold surges on US Fed rate anticipation: What experts said
&imwidth=600&imheight=450&format=webp&quality=medium "Rupee hits lowest-ever level, gold surges on US Fed rate anticipation: What experts said")
An expert said the rupee might touch 87.50 in October. Photograph: (AFP)
Why did the Indian rupee drop against the US dollar? KN Dey, a currency expert, said the volatility may continue over the next few days.
The Indian rupee recorded its lowest levels on Tuesday, with the currency reaching a record low of 88.75 against the US dollar. According to reports, the pressure on the rupee came amid concerns over the Donald Trump administration's decision to levy a $100,000 fee on every H1B visa application.
What experts said about the Indian rupee's performance
KN Dey, a currency expert, said the volatility may continue over the next few days. However, the rupee's weakness may not increase much.
"There were some FII's buying yesterday, later part of trading hours, and today it's the month/half-year end outflows by general importers. Also, some export forward contract cancellations are reported. Next 2/3 days' volatility may continue, but the Rupee's further weakness may not be much," Dey noted.
He said the rupee might touch 87.50 in October.
"In fact, 88.47/50 are good levels to sell long term, with 1 year forward quoting at 90.52. RBI is actively intervening in the market to avoid any undue volatility. Come October, hopefully the rupee should possibly start strengthening and might touch 87.50/60 in the coming 2 months," Dey added.
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Gold prices surge
Meanwhile, amid geopolitical tensions, gold prices surged further.
"Gold breached the door of USD 3700 once again, while silver went way past USD 43 on COMEX. Gold at USD 3787/ounce," Modi highlighted.
Manav Modi, Analyst - Precious Metal Research, Motilal Oswal Financial Services, said the prices were increased because the gold markets are watching further comments from Fed Chair Jerome Powell on the US Fed rate cuts.
The central bank lowered rates by 25 basis points last week.