Rupee depreciates 40 paise against US dollar in early trade

The rupee opened 12 paise lower at 69.80 against the US dollar on Tuesday amid mixed Asian cues. Minutes later, the currency depreciated further to surpass 70-mark at 70.08. 

On Monday, the domestic currency pared early gains but managed to end four paise higher at 69.68 following dovish stance by the Federal Reserve and rising hopes of a thaw in ongoing US-China trade tiff.

Besides, smart gains in domestic equities and weakening of the greenback in overseas markets propped up the Indian currency, said a PTI report.

The dollar-rupee January contract on the NSE was at 69.82 in the previous session. January contract open interest increased 12.02 per cent in the previous session, analysts at ICICI Direct Research said. "We expect the US$/INR to meet supply pressure at higher levels. Utilise upsides in the pair to initiate short positions," they added. 

On the global front, most Asian stocks were trading higher in the early trade on hopes Washington and Beijing may be inching towards a trade deal and that US Federal Reserve would halt its tightening if economic growth slows further. Japan’s Nikkei rose 0.9 per cent while MSCI’s broadest index of Asia-Pacific shares outside Japan ticked up just 0.1 per cent, though it was dragged down by falls in China and Taiwan, Reuters reported. 

The dollar traded at 108.78 yen, struggling to extend gains after having recovered to its levels before its flash crash last week. The US dollar is losing momentum as investors wind back expectations of rate hikes and a future widening in its yield advantage, the report added.