In early trade, the rupee decreases 43 paisas to 79.60 against the US dollar

The rupee started out at 79.58 versus the dollar on the interbank foreign currency market, but later dropped to 79.60, losing 43 paise from its previous finish. The local currency likewise reached 79.54 versus the dollar in the first transactions.

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Rupee lost 43 paise to open at 79.60 against the US dollar on Wednesday due to a significant risk-off reaction to a higher-than-expected US CPI data.

The rupee started out at 79.58 versus the dollar on the interbank foreign currency market, but later dropped to 79.60, losing 43 paise from its previous finish. The local currency likewise reached 79.54 versus the dollar in the first transactions.

The rupee strengthened by 36 paise on Tuesday, reaching an over-month high of 79.17 against the dollar.

The dollar index, which measures the strength of the dollar against a basket of six different currencies, decreased 0.03 percent to 109.77.

Benchmark Brent crude futures for world oil decreased 0.10 percent to USD 92.91 per barrel.

The US CPI for August came in higher than anticipated at 8.3% year over year and 0.6% month over month.

“The higher-than-expected print has raised the prospect of more aggressive monetary policy tightening by the US Fed. Markets now expect the terminal Fed Funds rate to be 4.25 per cent. Markets are also attributing a 20 per cent chance of a 100 basis point hike in the policy next week,” according to IFA Global Research Academy.

It said that the dollar had overnight reversed course and gained everywhere, causing major risk-off swings across all assets as a result of the US CPI report coming in higher than anticipated.

The 30-share BSE Sensex was down 559.31 points, or 0.92 percent, at 60,011.77 on the domestic equities market, while the larger NSE Nifty was down 155.20 points, or 0.86 percent, at 17,914.85.

According to exchange data, foreign institutional investors were net purchasers on Tuesday in the capital market, buying shares worth Rs 1,956.98 crore.