FX.co ★ Rupee Nears Record Low as Dollar Gains

The Indian rupee weakened to around 96.4 per dollar, hovering near record lows after a flat performance in the previous session, as a stronger US dollar, elevated US Treasury yields, and high oil prices boosted demand for the greenback. The dollar index climbed above 102, supported by euro weakness amid growing political and fiscal concerns in the euro area, while yields on 10- and 30-year US Treasuries advanced to fresh 24-year highs. At the same time, foreign equity outflows and persistent importer demand for dollar hedges continued to pressure the rupee, with Indian firms booking a record $77 billion in currency hedges in September, an increase of more than 80% year-on-year. The Reserve Bank of India has been selling dollars to slow the rupee’s decline, though traders expect the central bank to focus on smoothing the currency’s fall rather than defending any particular exchange rate level.