MUMBAI, Oct 17 (Reuters) – The Indian rupee ended at its weakest closing level on record on Thursday, weighed down by strong dollar demand from foreign banks, likely due to outflows from equities, and the weakness in regional peers as the U.S. dollar rose to an eleven-week high.
The rupee closed at 84.0675 against the dollar, down about 0.1% from its closing level of 83.9950 in the previous session. The currency is just shy of its all-time low of 84.0750 hit on Monday.
Two large U.S. headquartered banks and some state-run banks were bidding for dollars on Thursday, a trader at a state-run bank said.
“If outflows continue at this pace, it’s quite likely that the rupee will weaken towards 84.20,” the trader said.
Foreign investors have pulled out $8.1 billion, on a net basis, from local stocks over October so far, a sharp reversal from inflows of nearly $7 billion in the previous month.
Asian currencies were mostly weaker, with the Korean won down 0.5% and leading losses. The dollar index was a tad higher at 103.6, hovering close to its highest level since August.
“The dollar continues to firm and emerging currencies stay largely offered as the spectre of another possible Trump term of tariffs hangs over global FX markets,” ING Bank said in a note, referring to the heightened odds of a victory for Donald Trump in the upcoming U.S. presidential election.
Investors await U.S. retail sales and jobless claims data later in the day for cues on the future of Federal Reserve policy rates.
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Reporting by Jaspreet Kalra; Editing by Savio D’Souza
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