On the macro front, India's GDP in Q1 grew at 5 per cent compared to expectation of 5.7 per cent, thereby raising chances of further rate cut by the RBI. The Indian economy grew at a slowest pace in six years following weak investment growth and sluggish demand. Last week, the Finance Minister Nirmala Sitharaman announced a number of steps to revive economic growth and shore up market confidence, including rolling back recent tax hikes on foreign and domestic equity investors and several measures for industries.
"Today, USD/INR pair is expected to quote in the range of 71.60 and 72.30," said Gaurang Somaiya, Research Analyst (Currency) at Motilal Oswal Financial Services (MOFSL).
On the global front, stocks faced headwinds on Tuesday, stymied by US-China trade frictions while the British pound flirted with 2 1/2-year lows as Prime Minister Boris Johnson indicated he could call an election to block lawmakers’ efforts to avert a no-deal Brexit. MSCI’s broadest index of Asia-Pacific shares outside Japan shed 0.3 per cent while Japan’s Nikkei rose by 0.1 per cent, said a Reuters report.
In commodities, US crude was down 21 cents, or 0.4 per cent, at $54.89 a barrel by 08:14 am, while Brent was 5 cents higher at $58.71 a barrel. In the currency market, sterling dipped 0.25 per cent to $1.2030 , after having dropped 0.85 per cent on Monday. The currency stood just above its 2.5 year-low of $1.2015 hit on August 12, the Reuters report said.