Rupee falls to new all-time low against US dollar

A broad strength in the US dollar and weak domestic equity markets pushed Indian rupee today to record lows against the greenback today. After opening at 76.74, the rupee fell to a new low of 76.85, breaching last week's low of 76.55 per US dollar. In comparison, the rupee had settled at 76.44 in the previous session, which was also an all-time closing low for the Indian currency.

"Risk aversion and flight to safety has returned in global markets. US treasury yields are lower, commodities and commodity currencies are weak, equities are weak and we are seeing broad USD strength," said Abhishek Goenka, founder and CEO of IFA Global.

Other Asian currencies were also weaker against the US dollar today. The US dollar index, which tracks the movement of the greenback against six other major currencies, was up about 0.50% to 99.98.

Meanwhile, Indian stock markets are to flat-to-lower today.

The dollar has strengthened despite data released yesterday showed US retail sales fell 8.7% in March, the biggest decline since tracking began in 1992, underlining fears that damage to the economy from the virus outbreak will be deep and protracted. Consumer spending accounts for more than two-thirds of U.S. economic activity.

Separately, a report from the Federal Reserve showed manufacturing output plummeted 6.3% last month, the biggest decrease since February 1946.

Rupee may trade in a range of 76.45-76.90 against the US dollar today, said Mr Goenka of IFA Global, saying that Reserve Bank's stance need to be watched. "Though the yields on government securities eased a tad on account of lower crude prices, corporate bonds continue to remain under pressure. FPIs are currently utilizing only 39% of their eligible limit in corporate bonds and 52% of their limit in government securities. In April, so far we have seen $1.2 billion of outflows from domestic debt," he added.

Meanwhile, the International Monetary Fund or IMF has said that Asia's economic growth this year will grind to a halt for the first time in 60 years, as the coronavirus crisis takes an "unprecedented" toll on the region's service sector and major export destinations.

The number of cases around the world linked to the new coronavirus has crossed over 20 lakh while in India total cases has gone up over 12,000.