Rupee opens 26 paise higher at 69.88 against US dollar

The rupee opened 26 paise higher at 69.88 against the US dollar on Wednesday amid a sharp fall in crude oil prices. 

The domestic unit Monday recovered by 4 paise to close at 70.14, aided by weak crude oil prices and the dollar's losses in global markets due to political uncertainty in the US.

On Wednesday, oil prices were mixed as the US benchmark rebounded from steep losses in the previous session, even though concern over the health of the global economy continued to overshadow the market in the longer term.

US West Texas Intermediate (WTI) crude futures, were up 35 cents, or 0.82 per cent, at $42.88 per barrel, at 07:22 am, having at one point risen as high as 2 per cent from the last close. They had slumped 6.7 per cent in the previous session to $42.53 a barrel - the lowest since June 2017, Reuters reported. 

Gaurang Somaiya, Research Analyst - Currency at Motilal Oswal Financial Services says, "Rupee in the last few sessions has been consolidating in a narrow range of 69.70 and 70.30 and with most global markets remaining shut we could continue to witness this low volatile session for the day." 

Plunge in global crude oil prices is benefitting rupee but at the same time uncertainty in global equities is keeping appreciation capped for the currency. Uncertainty in global markets was triggered after US government partially shut down on Saturday, and there is not yet any sign of tangible efforts to reopen agencies closed by a political impasse over Trump’s demand for border wall funds. Today, USD/INR pair is expected to quote in the range of 69.70 and 70.30, Somaiya added. 

On the equities front, Asian markets were shaky following a Christmas eve Wall Street plunge, as investors were unnerved by US political developments including a US federal government shutdown and President Donald Trump’s hostile stance toward the Federal Reserve chairman, as per Reuters report.