Rupee weakens 14 paise to 69.65 against US dollar

The rupee on Tuesday opened 14 paise lower at 69.65 against the US dollar. The domestic currency on Monday closed with a marginal rise of 2 paise at 69.51 amid a recovery in the greenback against Asian currencies and foreign fund flows.

Rupee on Monday consolidated in a narrow range against the greenback as most market participants remained cautious ahead of the important GDP (gross domestic product) numbers for the fourth quarter that will be released later this week.

Expectation is that growth number could come in at 6.4 per cent compared to growth of 6.6 per cent in the previous quarter. On the other hand, fiscal data will also be released and widening deficit could keep the rupee under pressure, said Gaurang Somaiya, Research Analyst (Currency) at Motilal Oswal Financial Services (MOFSL). 

In the bond market, the yield of benchmark 10-year government bonds fell to a 13-month low of 7.165 per cent after the Reserve Bank announced open market operations in June, Retail Research Head Deepak Jasani said.

Foreign institutional investors (FIIs) were net buyers in the capital markets, buying shares worth 2,026.33 crore on Friday, according to exchange data.

"Today, USD/INR pair is expected to quote in the range of 69.20 and 69.90," Somaiya says. 

On daily chart, the USD/INR pair has marked a bullish candle with shadow on either side thus resembling the bull-bear pull in the pair. "If the pair maintains the 69.50 levels it can test 70 in the session, thus long position can be taken in this scenario," say Nirmal Bang Securities in its daily currency report.

On the global front, Asian shares edged up on Tuesday following gains in European stocks. MSCI’s broadest index of Asia-Pacific shares outside Japan was up 0.07 per cent in early trade, and US S&P 500 e-mini futures rose 0.14 per cent to 2,835.75. Australian shares were up 0.51 per cent, while Japan’s Nikkei stock index gained 0.41 per cent, Reuters reported. 

The dollar was up 0.05 per cent against the yen at 109.55, and fell 0.04 per cent against the euro, with the common currency buying $1.1192. The dollar index was 0.14 per cent higher at 97.754.

In commodity markets, crude oil prices firmed above $70 per barrel, said a Reuters report. 

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel