Why Indian Rupee Fell by 55 Paisa in Single Session?

Reasons of Indian Rupee Fall : Indian Rupee opened lower 55 paise at 71.95 per dollar on Tuesday 3rd of September. Till the noon session it reached 72 rupee per dollar mark.Also the pressure on the rupee was seen after the selloff in benchmark indices Sensex and Nifty. Opening at 71.97 a dollar, the rupee fell to 72.37 to the day’s low when compared to the previous close of 71.40. In this blog we are trying to figure out why the Indian rupee is under pressure.

Indian Rupee fall due to GDP datar
On Friday the GDP (Gross Domestic Product) data was released. It indicated that the GDP fell to 6 days low to 5% in the previous quarter. The reason behind this was low consumer demand and dull investment. Consumption, the bedrock of growth in the past few years, collapsed to an 18-quarter low of 3.1% from 10.6% in the March quarter, pointing to fragile sentiment. Investments grew 4%, up from 3.6% in the previous quarter.

Stronger US Dollar could be a reasonr
Stronger Indian Dollar also contributed the also was the reason why the Indian rupee fell this much. The dollar was stronger due to strong US economy. The dollar index, which measures the greenback against a basket of six major currencies, was up nearly 0.4%, having climbed to a more than a two-year high.

Speech of John Williums and Jerome Powellr
Forex traders are looking ahead to comments from New York Fed’s John Williams on Wednesday and Fed chair Jerome Powell on Friday. The US jobs report is also due on Friday. The US Fed in July cut its interest rate for the first time this decade and traders expect another cut later this month amid global slowdown conce
s.

Another reason could be drawing up of FIIs and FPIs. The rupee is down about 3.5% against the US dollar so far this year amid outflows from domestic capital markets over slowdown conce
s. Broad outflows from emerging market assets also hurt the rupee. The rupee marked the worst monthly loss in August in six years against the US dollar amid foreign fund outflows and a weaker domestic macro environment, says HDFC Securities in a note.