Rupee hits all-time low against US dollar

<p>The Indian rupee is at an all-time low.</p>

The Indian rupee has lost more value against the US dollar and is now at a record low compared with the commodity.

It fell as low as 59.93 today (June 20th), down from its Wednesday close of 58.72. The move came on the back of an announcement from the US Federal Reserve that it could start reducing its asset purchasing programme soon.

Stuart Oakley, head of Asian currency trading at Nomura, told BBC News: "It is a classic case of a country's vulnerability to capital flight because of its current account deficit situation."

The rupee is down by more than 15 per cent against the US dollar since October last year, replicating the drops seen by the yen in recent months, though the yen has rebounded in the last few days. Analysts noted how the deficit situation and high inflation have weighed heavily on the rupee in the last year.

Last week (June 14th), the Dollar Index dropped to its lowest point in the last four months. Douglas Borthwick, a managing director and head of foreign exchange at Chapdelaine FX in New York, said: "The market got ahead of itself in early June."

Learn about the Asian markets and CFD trading at City Index

Build your confidence risk free
Join our live webinars for the latest analysis and trading ideas. Register now

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.