Rupee falls 5 paise to hit new all-time low of 84.37 against U.S. dollar

Rupee hits record low against dollar due to Fed rate cut, Trump policies, and global market volatility.

Declining for the third straight session, the rupee dropped 5 paise to hit a new lifetime low of 84.37 (provisional) against the U.S. dollar on Friday (November 8, 2024), weighed down by persistent foreign fund outflows and a muted trend in domestic equities.

Forex traders said the U.S. Federal Reserve's recent decision to cut interest rates signals a shift in the global financial landscape. Moreover, with Donald Trump's tax and trade policies influencing global markets, volatility could re-enter the rupee's trajectory.

At the interbank foreign exchange, the rupee opened at 84.32 against the U.S. dollar. During the session, the local currency touched a high of 84.31 and a low of 84.38. It finally settled at 84.37 (provisional), a loss of 5 paise against its previous close.

On Thursday, the rupee slipped 1 paisa to close at a fresh lifetime low of 84.32 against the U.S. dollar.

In the last three sessions, the local unit has lost 28 paise against the greenback.

The rupee hit a record low on account of extending sell-off in the domestic markets and continuous foreign fund outflows. Overnight gains in crude oil prices also weighed on the rupee, said Anuj Choudhary – Research Analyst at Sharekhan by BNP Paribas.

However, the softening of the U.S. Dollar index cushioned the downside. The dollar softened as the U.S. Federal Reserve cut interest rates by 25 bps in line with street estimates. The Fed Chair Jerome Powell said in his presser that the U.S. economy was strong and some downside risks seemed to have diminished.