Rupee hits record low ahead of US election results 2024, RBI may step in

Rupee at record low: The rupee fell 14 paise to an all-time low of 84.23 against the US dollar in early trade on Wednesday, dragged down by persistent foreign fund outflows and the strength of the American currency in the overseas market.

Forex traders said with the US election underway, markets are already showing signs of volatility -- a trend likely to calm once a clear winner emerges in this tightly contested race.

Moreover, the US Fed is expected to announce a rate cut in a meeting scheduled later this week, with further easing of up to 100 basis points projected for 2025.

At the interbank foreign exchange, the rupee opened at an all-time low of 84.23 against the greenback, registering a fall of 14 paise over its previous close.

On Tuesday, the rupee settled 2 paise higher at 84.09 against the US dollar.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 1.64 per cent higher at 105.11.

"The dollar index rose after Trump went up in the US elections initial results and was also leading in the Senate and House," said Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP.

Brent crude, the global oil benchmark, fell 0.98 per cent to USD 74.79 per barrel in futures trade.

"All will depend on RBI as to where it will allow the rupee to open and how it will move depending on intra-day election results. Wide range for rupee would be 84.00 to 84.35," Bhansali said.

On the domestic equity market front, Sensex advanced 390.93 points, or 0.49 per cent, to 79,867.56 points. The Nifty jumped 135.60 points, or 0.56 per cent, to 24,348.90 points.

Foreign institutional investors (FIIs) were net sellers in the capital markets on Tuesday, as they offloaded shares worth Rs 2,569.41 crore, according to exchange data.