Indian rupee was trading lower at 76.86 per US dollar touching Dh20.94 amid domestic equity market trading marginally lower. The currency opened 30 paise lower at 76.74 per dollar against Wednesday's close of 76.44.
"India's currency has fell to record lows against the US Dollar and the trend is likely to continue. In the near term, AED/INR rate is likely to rise to 21.30 while in a six month time frame 21.85 is possible," said Vijay Valecha, Chief Investment Officer, Century Financial.
"The fear over Corona virus pandemic and lock down initiated to flatten the curve of Corona virus infections could plunge India into its first economic contraction since 1980. Major rating agencies are also likely to downgrade India as the domestic credit crunch is likely to lead to a fresh rise in NPAs (Non-Performing Assets) across the banking system. Mexico, a prominent emerging market, has already been downgraded resulting in fall of its currency. Even though India's crude oil import bill will fall, the decline in foreign remittance as well as foreign portfolio investments could deteriorate the Current Account Deficit (CAD) of the country, pressuring the rupee," added Valecha.
The dollar-rupee April contract on the NSE was at 76.72 in the previous session. The open interest has declined almost 7 per cent during the session. The rupee failed to show signs of any appreciation and moved to life-time lows despite the recent recovery. We believe weakness may continue and one should utilise downsides in the pair to initiate long positions, said ICICIdirect.
"Fears and concerns over the economic disorder caused by the coronavirus pandemic, strength in dollar index, along with a late session sell-off in domestic equities weighed on the local unit. Sentiments continue to remain quite shaky. At the same time, market participants are eyeing any announcement with regards to the second round of stimulus package from the government, that may help in lifting the sentiments," said Sugandha Sachdeva VP-Metals, Energy & Currency Research, Religare Broking in a section of Indian media.
The dollar's index against a basket of six other major currencies stood at 99.632, maintaining the 0.8 per cent gain from the previous session. The euro backed off to $1.0911 from a two-week high of $1.0980 while the dollar stood at 107.42 yen, having added 0.2 per cent on Wednesday.
The British pound traded at $1.2523 having lost nearly 1per cent in the previous session. The Australian dollar changed hands at $0.6318 following a drop of 1.9 per cent on Wednesday, its biggest since March 18, ahead of local employment data due at 0130 GMT.
A plunge in crude prices weighed heavily on oil-producing countries' currencies. The Norwegian krona softened 1.4 per cent to 11.470 per euro in the previous session. The Canadian dollar nursed losses at C$1.4116. The Bank of Canada on Wednesday added to the suite of assets it is purchasing to cushion the economic blow of the coronavirus pandemic.
Source: Khaleej Times