The US dollar flexes its muscles in the currency markets and displays supremacy against local currencies, including the Indian rupee. The DXY index, which tracks the USDâs performance, shows the currency trading above the 106 mark. It has maintained its stronghold in the forex markets, making local currencies weak and tumble in the charts.
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The Indian rupee fell to a new all-time low of 84.87 against the US dollar on Tuesdayâs opening bell. This is the lowest point the INR reached vs the USD; the indices have only been nosediving since November. After Trump reclaimed the White House, gold went south while the stock and cryptocurrency markets and the US dollar went north.
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Optimism in Trumpâs presidency is at an all-time high, as traders believe he will steer the economy to greener pastures. However, local currencies could remain in muddy waters after Trump took the oath on January 20, 2025. Therefore, the Indian rupee is at risk of slipping below 85 before he enters the White House.
US Dollar King: Indian Rupee Remains Under Pressure
Source: Reuters / ShutterStock
Indian markets are facing turmoil after foreign institutional investors sold nearly $12 billion worth of equities in the last two months. Reserve Bank of India Governor Shaktikanta Das is now considering the buck to save the rupee. The policies he will take next will decide the rupeeâs prospects against the US dollar.
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âIt depends on what the new Governor decides on tackling the weakness in rupee or whether he follows the policies of his predecessor,â Anil Kumar Bhansali, Head of Treasury and Executive Director Finrex Treasury Advisors, said. âThe weakness in the rupee is here to stay for now unless RBI Governor decides the other way.â Until then, the US dollar is poised to rule the roost, making local currencies bite the dust.
