By Jaspreet Kalra
MUMBAI (Reuters) – The Indian rupee ended at a record closing low weighed down by dollar demand from local oil companies and weakness in its Asian peers.
The rupee closed at 83.4350 against the U.S. dollar, weaker by 0.06% compared to its close at 83.3850 in the previous session. The rupee ended just shy of its historical low of 83.45 hit last week.
Most Asian currencies fell with the Thai baht down 0.3% and leading losses, while the offshore Chinese yuan also weakened 0.1% to 7.26.
During the day’s session, dollar demand from importers, including local oil companies, pressured the local unit, a forex trader at a foreign bank said.
Foreign banks were seen offering dollars in the latter half of the session which helped limit the rupee’s losses, the trader added.
Meanwhile, exchange-traded options of the Indian rupee faced turmoil on Wednesday after brokers asked clients to submit proof of underlying exposure on their derivative contracts or unwind their existing positions.
Given the ongoing strength in the dollar and elevated crude oil prices, the rupee may stay under pressure in the near-term, Arnob Biswas, head of foreign exchange research at SMC Global Securities said.
The dollar index is up 3.3% so far in 2024, and was last quoted at 104.8. Sustained strength in the United States economy, as seen in factory orders data released on Tuesday, has boosted U.S. bond yields supporting the dollar.
Brent crude oil futures were at $89.21 per barrel, hovering close to their highest level since October as rising geopolitical tensions fuelled concerns about supply.
Investors now await a raft of U.S. Federal Reserve speakers slated to speak later in the day, including Chair Jerome Powell.
The remarks may offer cues on potential timing of interest rate cuts by the Fed and precede the closely watched non-farm payrolls report due on Friday.
(Reporting by Jaspreet Kalra; Editing by Shounak Dasgupta)
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