Indian rupee marks biggest monthly losing streak since 1985
MUMBAI, Oct 31 (Reuters) - The Indian rupee has declined in each of the ten months this year to notch its biggest losing streak in almost four decades as the U.S. Federal Reserve's hawkish stance on monetary policy catapulted the dollar to two-decade highs.
The dollar index is up 16% this year, having scaled 114.8-levels last month to trade near its 2002 peak. Its ascent has pressured currencies globally, especially ones in emerging Asian markets.
The Indian rupee fell 1.8% against the dollar in October, taking its slide for the year to nearly 11%.
Surging oil prices due to the Russia-Ukraine conflict and weakness in the Chinese yuan have only piled on more pressure on the rupee and helped send it to a record low of 83.29 per dollar earlier this month.
The rupee's losses have been deeper in the past two months, with market participants reckoning that the Reserve Bank of India let the currency slide after having helped hold it at the 79-80 levels for a long time.
Almost all traders and economists expect there will be no let-up in the pressure on the rupee for the rest of the year as the Fed stays on its aggressive rate-hike path after making fighting inflation its priority.
"This week, the Fed's upcoming meeting would be crucial for the rupee outlook. It could come under pressure in case Fed indicates aggressive tightening path in the future," HDFC Bank economists wrote in a note.
"Broadly, 81.80 to 82.00 seems a strong support zone for the USD/INR pair. As long as it trades above this convincingly, one can expect a U-turn towards 82.80 to 83.00 levels," said Amit Pabari, managing director at consultancy firm CR Forex Advisors.
(Reporting by Anushka Trivedi in Mumbai; Editing by Savio D'Souza)
