MUMBAI: The Indian rupee eased off a record low versus the dollar on Tuesday as oil prices hovered near an eight-month low and risk aversion eased somewhat.
The rupee was trading at 81.39 per US dollar by 0452 GMT after slipping to 81.6225 in the previous session.
The currency is poised to halt a four-day losing streak that was fuelled by the dollar’s broad rally and concerns over the wider impact of the volatility in the British pound.
The rupee has traded in an 81.31 to 81.49 range so far in the session.
The local unit is “highly likely” to move above 81.20-81.30, considering that orders lined up by importers, a trader at a state-run bank said.
Oil prices were a tad higher on Tuesday after slipping in the previous session to its lowest level since January. Brent crude futures were at just above $84.50, down more than 12% month-to-date.
The dollar index dipped to 113.70 in Asia, pulling away from multi-year highs.
A recovery in US equity futures and the pound put the dollar gauge on course for its biggest decline in about two weeks.
Despite the pullback, analysts remained upbeat on the dollar’s outlook, thanks to the relative difference in the pace of rate hikes by the US Federal Reserve and other major central banks.
“The pace and speed of tightening monetary policy among major central banks is biased towards US dollar dominance in 2022 and the first half 2023,” ANZ Research said in a note on Tuesday.
“We now expect it to peak in the first half of 2023, in line with our recent updated forecasts for the Fed funds rate at a terminal level of 5%.”
Indian shares rose, recovering from two-month lows. Rupee forward premiums were slightly lower.
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