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29 March 2024

UAE dirham flirts with Rs17; Sterling plumbs 5-year lows

Indian rupee, on the other hand, could face resistance at Rs62.84 against the US dollar (Rs17.10 against Dh1) in the coming few days. (File)

Published
By Vicky Kapur

The UAE dirham, linked as it is to the US dollar, is on a roll this morning, making a two-week high against the Indian rupee even as the pound sterling fell to an almost five-year low against it.

The Indian rupee is trading at Rs16.99 against Dh1, and may fall to Rs17.10 this week, according to traders.

The focus currency of the day, however, is the pound sterling, which fell to an almost five-year low on opening this morning on the back of dismal data announced at the end of the previous week. The sterling is currently trading at Dh5.35 vs £1, a level not seen since June 10, 2010.

Weak industrial data coupled with political uncertainty surrounding next month’s UK polls are the primary drivers pushing the sterling lower.

“Before the weekend, the pound-euro exchange rate was valiantly holding its own, but the British currency plummeted to a five-year low against the US Dollar as a soft set of UK data took a toll,” according to ExchangeRates.co.uk, a financial blog.

“The short-lived rally in the GBP/USD exchange rate (which saw the pairing rise to within touching distance of 1.50) looked like a distant dream as the possibility of a US interest rate revision taking place this summer buoyed the US dollar and the uncertainty surrounding the UK election sank the pound,” it noted.

Going forward, it notes that, over the next five days, “the US Advance Retail Sales and Consumer Price Index reports” will have an impact on the exchange rate.

“Economists have predicted a rebound in US consumer spending, and if assessments prove accurate the data could give the ‘greenback’ a further boost,” the report states.

The Indian rupee, on the other hand, could face resistance at Rs62.84 against the US dollar (Rs17.10 against Dh1) in the coming few days even as it could sink as low as Rs63.49 vs $1 (Rs17.28 vs Dh1), according to the latest currency report by HDFC Securities.