The Indian rupee hit an all-time low of 78.40 against the U.S. dollar on Wednesday, tracking the weakness of the domestic and international equity markets and emerging market currencies, which remained under pressure against the greenback.

The local currency tumbled against the dollar in the last 30 minutes of the session and settled at a historic low as mounting concerns about the risk of a global recession from the impact of aggressive spells of rate hikes by central banks dampened demand for riskier assets, says Sriram Iyer, senior research analyst at Reliance Securities.

The U.S. Dollar Index was trading flat on Wednesday afternoon trade in Asia as investors await the testimony from Fed Chair Powell tonight. The euro was trading flat to marginally weaker against the greenback this Wednesday afternoon trade in Asia. Meanwhile, the pound sterling rebounded from session lows but remained under pressure after British consumer prices rose to 9.1% last month.

This comes even as Brent crude August futures crashed 5% amid fears of slowdown in global growth. The international crude oil benchmark fell to $108.98 a barrel.

Crude oil prices started on a weaker note in Asian trade amid a push by U.S. President Joe Biden to bring down soaring fuel costs, including pressure on major U.S. firms to help ease the pain for drivers during the country's peak summer demand.

Brent crude prices had soared to $124 a barrel last month after European Union leaders agreed to ban almost 90% of Russian oil imports by the end of the year.

Meanwhile, Indian equity benchmarks, the Sensex and the Nifty 50, fell 1.35% and 1.44%, respectively, on Wednesday.

Indian bond yields also crashed, tracking the fall in oil prices, easing worries over soaring inflation. The benchmark 6.54% bond ended 7.40% against yesterday’s close of 7.48%.

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