Early on Thursday, when the US Federal Reserve raised interest rates and signalled a more aggressive policy course for the current tightening cycle, the rupee declined to a new record low and the Dollar rose to a new two-decade high.

According to Bloomberg, the rupee touched an all-time low of 80.4863 versus the dollar after previously closing barely below the psychologically significant 80-per-dollar level.

According to PTI, the local currency dropped 42 paise to a brand-new record low of 80.38 versus the US dollar in early trade.

According to forex dealers, the local currency suffered from the strength of the American dollar in the international Market, a flat domestic equity market, risk-off sentiments, and robust crude oil prices.

“The Reserve Bank of India may also attempt to modify its intervention function in light of the widespread dollar strength. On Thursday, we’re most likely to see a range of 80.10 to 80.50 “According to IFA Global Research Academy, PTI.

The dollar reached a 20-year high as investors fled to safe haven assets as the thought of US interest rates increasing more quickly than anticipated alarmed them.

The dollar index, which compares the performance of the dollar to six other major currencies, rose 0.2% to a new high of 111.72, up 2% this week and almost 17% this year.

According to David Croy, a strategist at Australia & New Zealand Banking Group, “after an initial bout of volatility in the first couple hours after the Fed hike, the market has clearly sided with the US dollar, which offers better carry and safe-haven appeal as downside US and global growth fears percolate.”

According to Bloomberg, tensions between Beijing and Taiwan and Russia’s deepening of its conflict with Ukraine both negatively impacted mood.

The euro fell to a 20-year low of $0.9807 following Russia’s first reserve mobilisation since World War II.

The value of the British pound dropped to its lowest point in 37 years, while those of Australia, New Zealand, Canada, Singapore, and China all hit two-year lows. The yen was almost at a 24-year low as investors anticipated a Bank of Japan meeting.

According to Sally Auld, chief investment officer at wealth management JB Were in Sydney, “The Fed is not going to stop any time soon, and there’s going to be a protracted period of tight monetary policy for at least the next year or so.”

She continued, noting growth clouds over Europe, Britain, and China as well as the yen’s weakness while Japan keeps interest rates low, asking, “What else do you purchase but the US dollar at the moment?”

The US yield curve deepened its inversion, with short-end Treasuries being sold and the longer-end jumping, as investors priced out the likelihood of a “soft” economic landing and made plans for damage to longer-term growth.

After the announcement of the rate rise, Fed Chair Jerome Powell told reporters that “the prospects of a gentle landing are likely to decline to the degree that policy has to be more restrictive, or restrictive for longer.”

In a statement, Jerome Powell stated that the Fed is “strongly determined” to bring inflation down to the desired level of 2%. “We will keep working till the task is done,” he continued. The term was a parody of former Fed chairman Paul Volcker’s biography “Keeping at It.”

Clara Cheong, a global market strategist at JPMorgan Asset Management, stated on Bloomberg Radio, “In terms of Asia, I think the Federal Reserve’s result is likely to sustain pressure on risk assets.” Due to the impact of a high dollar, export-oriented businesses might be particularly harmed.

For the first time since 2009, South Korea’s won fell below the 1,400 level against the US dollar, while the yuan declined even as China continued to set the reference rate for the currency higher than anticipated for a record-breaking 21st day.