Rupee gains further, opens 22 paise higher against US dollar

The domestic unit on Tuesday strengthened by 48 paise to close at one-month high of 70.70 against the dollar.

Extending its gains, the rupee on Wednesday opened 22 paise higher at 70.48 against the US dollar. The domestic unit on Tuesday strengthened by 48 paise to close at one-month high of 70.70 against the greenback. It was the sixth straight session of gains for the currency. 

In the six trading sessions, the rupee has gained 110 paise. Optimism ahead of index of industrial production (IIP) numbers for December and retail inflation for January supported the rupee on Tuesday, PTI reported quoting analysts.

Official data showed India's retail inflation eased to a 19-month low of 2.05 per cent on lower food prices, whereas the country's industrial output in December 2018 was the slowest in the last 17 months at 2.4 per cent. The numbers were released post market hours on Tuesday.

On the daily chart, the USD/INR pair has formed a red candle with lower lows and lower highs, indicating weakness in the pair. Selling in the pair can be initiated below 71.25 -71 towards 70.50 levels. However, a small pullback towards 71.25 can be expected at the first half of the session, said analysts at Nirmal Bang Securities. 

On the global front, Asian stocks rose to a more than four-month high on Wednesday, lifted by optimism that the United States and China might be able to hammer out a deal to resolve their nearly year-long trade dispute. 

In the currency market, the dollar was steady at 110.57 yen. The dollar index stood at 96.697 after its eight-day winning run came to an end overnight to push it away from a two-month peak.