The Indian rupee fell for the fourth consecutive session on Thursday, recording its worst day against the dollar in two months, under pressure from a fall in regional currencies and a rise in oil prices amid intensifying conflict in Middle East.
The rupee ended at 83.9675 against the US dollar, down from 83.82 in the previous session.
The domestic currency fell to its intraday low of 83.97 during the session, just short of its all-time low of 83.9850 reached last month.
“While the 84 level is expected to act as strong support for the Indian currency, any escalation in geopolitical conflicts or a significant increase in oil prices could push the rupee towards a new record low,” said Sugandha Sachdeva, founder of SS WealthStreet, a research firm based in New Delhi.
Large outflows of foreign portfolios from Indian markets also weighed on the rupee, Mr. Sachdeva added.
However, the Reserve Bank of India is unlikely to “relax its grip” and will intervene if the rupee rises above 84 against the dollar, “in rapid succession”, a trader at a private bank said.
Most Asian currencies fell on Thursday, with the Thai baht, Malaysian ringgit and Indonesian rupiah each losing around 1% against the dollar.
The prospect that the Federal Reserve will be in no hurry to cut interest rates, coupled with volatile oil prices amid the Middle East conflict, has increased the dollar’s appeal as a safe haven.
“Markets are awaiting Israel’s retaliation against Iran, which should determine whether oil rises,” ING bank said in a note.
The dollar is “in a solid position”, according to ING.
U.S. private employment figures rose more than expected last month, boosting expectations for a robust reading of monthly nonfarm payrolls figures on Friday.
The odds of a 50 basis point cut in US interest rates in November are currently around 36%.
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