The dollar index changed course after data revealed that US services industry activity unexpectedly increased in November, with jobs rebounding
The Indian rupee had its worst trading session in more than two months as dollar saw its greatest surge in two weeks after strong US November services data which suggested that the Federal Reserve may continue with its aggressive rate hike stance.
The rupee fell to 82.60 compared to its previous close of 81.79 on Monday.
Investors will await the outcome of Reserve Bank of India’s (RBI) MPC meet outcome on Wednesday.
The dollar index, which measures the greenback against a basket of its major peers, dropped below 104 for the first time since June 28. However, it changed course after data revealed that US services industry activity unexpectedly increased in November, with jobs rebounding.
Traders told news agency Reuters that they were caught off-guard by the rupee’s sudden decline, prompting a round of stop losses that probably sped up the drop once USD/INR moved above 82.