Rupee opens 11 paise lower at 70.05 against US dollar

The rupee breached the crucial 70 level a US dollar in the opening trade on Friday amid subdued global cues and rise in crude oil prices. On Thursday, the domestic unit depreciated by 23 paise to settle at 69.94 on unabated foreign fund outflows amid simmering US-China trade tensions.

Firming oil prices and a prolonged spell of weakness in the equity markets also weighed on the domestic unit, PTI reported quoting forex dealers as saying.

The rupee has now lost a hefty 72 paise in four sessions (as of Thursday's close), the report added. 

"The uncertainty related to election outcome and US-China trade deal have been weighing on the rupee. Overseas investors have turned cautious for the domestic equity and debt market and started reducing their position ahead of the election outcome scheduled on 23rd May 2019," said V K Sharma, Head PCG and Capital Markets Strategy, HDFC Securities.

"Today, USD/INR pair is expected to quote in the range of 69.7 and 70.50," says Gaurang Somaiya, Research Analyst (Currency) at Motilal Oswal Financial Services (MOFSL). 

On the global front, Asian shares inched up from two-month lows on Friday, hours ahead of the Trump administration’s plan to raise tariffs on Chinese imports. US President Donald Trump said on Thursday he had received a “beautiful letter” from Chinese President Xi Jinping, stoking hopes that Washington may suspend its plan to raise tariffs on $200 billion worth of Chinese goods to 25 per cent from 10 per cent at 12:01 am, Reuters reported. 

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 1.1 per cent, led by gains in Chinese shares. Shanghai composite rose 3.1 per cent. Japan’s Nikkei rose 0.7 per cent, while e-mini futures for US S&P500 rose 0.3 per cent in early Asian trade, the report said. 

In the commodity market, oil prices held firm. Brent rose 1.1 per cent to $71.16 a barrel while US West Texas Intermediate (WTI) crude gained 1.1 per cent to $62.39.