Mumbai: Weakening for the third consecutive day, the Indian rupee touched a 19-month low of 68.70 per dollar on Wednesday due to rising crude oil prices and the ongoing trade war concerns.
It ended 36 paise weaker at 68.61 against the previous close of 68.25 per greenback.
"The Indian rupee fell to a 19-month low of 68.70, pressured by rising oil prices and continuing trade wars, which could result in more bouts of FII (Foreign Institutional Investors) outflows," said Deepak Jasani, Head of Retail Research at HDFC Securities.
Jasani further said the rupee could cross the 70-mark over the next few weeks "if the situation does not ease out soon."
Crude oil prices surged on Wednesday after the US government said companies buying Iranian crude oil after November 2018 would face sanctions by Washington.
Further, on the trade front, concerns of a trade-war like situation between the US and other major economies such as China and the European Union also kept sentiments weak across markets.
Rushabh Maru, Research Analyst from Anand Rathi commodities explained in a note that the rupee depreciated owing to combination of domestic and global factors.
He said, "Now the 68.86 (USDINR spot) is the key level to watch out for the rupee. We expect the RBI may intervene aggressively around 68.80 - 68.85 levels to defend the currency. But if 68.86 level is taken out then we may see sharp depreciation in the rupee in coming sessions and it may move towards 70.00 - 70.50 levels immediately."
"Rising crude oil prices, trade war concerns, strength in the dollar index and weakness in the emerging market currencies are key factors for the rupee depreciation. Steady capital outflows and worsening domestic macroeconomic fundamentals are also key factors for the rupee depreciation. Exporters are reluctant to hedge their exposure in the current market as the rupee is weakening every day. On the other hand, 68.00 levels is very good support for the USDINR. We are seeing importers buying on every dip in the USDINR," he explained.