Rupee opens 16 paise higher at 70.05 against US dollar

The rupee opened 16 paise higher at 70.05 against the US dollar on Wednesday amid positive global cues and rise in crude oil prices. 

On Tuesday, The domestic unit plunged by 53 paise to close at 70.21 amid renewed concerns over widening of current account deficit (CAD) following constant rise in global crude oil prices. This was the first loss for the Indian currency unit in three sessions. It had risen by 52 paise in the previous two trading days.

Rupee remained under pressure for the second successive session on Tuesday, primarily on back of rise in global crude oil price. On the domestic front, lower estimates of growth kept the currency weighed down against the greenback. Official data showed the economy is expected to grow at 7.2 per cent compared to RBI’s estimate of 7.4 per cent.

Broadly, the pair is expected to quote in the range of 69.70 and 70.30 ahead of the important inflation number that will be released later this week, said Gaurang Somaiya, Research Analyst(Currency) at Motilal Oswal Financial Services. 

"Slower rise in inflation could support the rupee on lower levels. Today, USD/INR pair is expected to quote in the range of 69.70 and 70.50," the analyst added. 

According to a Reuters poll, the battered Indian rupee will take another bruising this year, despite a recent revival, weighed down by uncertainty around national elections in May and an expected economic slowdown. “Overall there’s nothing to be greatly optimistic about the rupee. There are lots of uncertainties, both on economic and political fronts lingering as we enter into 2019,” said Prakash Sakpal, Asia economist at ING, adding that elections and political uncertainty pose “the biggest risk”.

On Tuesday, foreign investors (FIIs) were the net sellers to the tune of Rs 553.78 crore while domestic investors (DIIs) were the net buyers to the tune of Rs 698.17 crore, NSE data showed. 

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